Jollibee raises $600M from offshore capital mart debut

Fast-food giant Jollibee Foods Corp. (JFC) has debuted into the offshore capital market by raising $600 million from a landmark issuance of perpetual securities, replenishing its war chest after buying American specialty chain Coffee Bean & Tea Leaf (CBTL).

This transaction represents the first ever bond or perpetual securities issuance from JFC and the first time that this globalizing restaurant chain has tapped the capital market since its initial public offering in 1993. The issuance is also one of the first by an Asian restaurant company.

Through its wholly-owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL), the group is issuing US dollar-denominated Regulation S senior perpetual capital securities at a rate of 3.9 percent per annum for the first five years.

Regulation S securities refer to bonds or stocks that may not be offered, sold or delivered within the U.S.

In a disclosure to the Philippine Stock Exchange on Friday, JFC said the transaction was oversubscribed by almost 10 times the original intended issue amount of $400 million. This brisk demand allowed the company to upsize the transaction and tighten final pricing by 35 basis points from the initial price guidance of 4.25 percent. This marks the lowest pricing for a five-year perpetual securities issued by a Philippine company.

“The objective of management for this issuance is to further strengthen the balance sheet of JFC to build a stronger foundation for accelerating its growth in order to achieve its vision to become one of the top five restaurant companies in the world,” JFC said.

Proceeds from the offering will refinance the short-term debt from the acquisition of International Coffee and Tea, LLC (The Coffee Bean & Tea Leaf), completed on September 24, 2019, alongside other gene􏰃al corp􏰃􏰊or􏰃at􏰀e purposes.

Citigroup and J.P. Morgan acted as the joint global coordinators. Citigroup, Credit Suisse, J.P. Morgan, and Mizuho Securities were the joint lead managers and joint bookrunners for the transaction while BPI Capital Corp., Chinabank Capital Corp. and PNB Capital and Investment Corp. were the joint domestic managers.