Jollibee raises $600M via bond issuance

Fast-food giant Jollibee Foods Corp. (JFC) has boos­ted its coronavirus (COVID-19) war chest by $600 million with the issuance of new bonds in the offshore market.

Through wholly owned unit, Jollibee Worldwide Pte. Ltd. (JWPL), JFC is raising fresh funds through the issuance of 5.5- and 10-year bonds sized at $300 million for each tenor.

The 5.5-year issuance was priced to yield 4.125 percent a year while the 10-year bonds carried a coupon rate of 4.75 percent, both payable semiannually.

As earlier disclosed, proceeds from the offering will be used for general corporate purposes, “intended as a precautionary measure from unforeseen eventualities that may be caused by the COVID-19 pandemic, as well as fund initiatives of the JFC and its group of companies.”

The bonds are “Regulation S” only US dollar-denominated guaranteed senior notes. Regulation S securities refer to bonds or stocks that may not be offered, sold or delivered within the United States.

This offering represents the second international capital market transaction from JFC, following the issuance of its $600-million senior perpetual capital securities in January 2020.

This bond deal also represents the third time that JFC has tapped the capital markets since its initial public offering in 1993.

The notes are unrated and will be listed on the Singapore Exchange Securities Trading Ltd.

Citigroup, Goldman Sachs, J.P. Morgan and Morgan Stanley acted as joint global coordinators, and Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, BPI Capital Corp., Credit Suisse and UBS acted as joint lead managers and joint bookrunners.

JFC said it had sufficient cash and liquidity—amoun­ting to P26.5 billion or $522.3 million as of end-March—to support its operations on a continuing basis and meet all its obligations.

JFC incurred a January to March attributable net loss of P1.79 billion, reversing the P1.46 billion net profit posted in the same quarter last year as the pandemic disrupted global operations just when the company was still digesting its acquisition of the Coffee Bean & Tea Leaf business.

As of end-April, JFC had a global network of 5,945 stores, of which 3,317 were in the Philippines. —DORIS DUMLAO-ABADILLA