Jollibee sets $600 million notes offer

MANILA, Philippines — Filipino fastfood chain Jollibee Foods Corp. (JFC) will issue $600 million worth of 5.5 and 10-year notes, proceeds of which will serve as a precautionary measure for the unforeseen eventualities that may be caused by the COVID-19 pandemic, as well as for other general corporate purposes.

In a disclosure to the Philippine Stock Exchange, JFC said the $300 million 5.5-year and $300 million 10-year Reg S only dual tranche guaranteed senior notes will be offered at a coupon rate of 4.125 percent and 4.750 percent, respectively, which will be payable semi-annually.

It added that the notes will be issued by Jollibee Worldwide Pte. Ltd. (JWPL), a wholly owned subsidiary of JFC.

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

“This offering represents the second international capital markets transaction from JFC, following the successful issuance of its $600 million senior perpetual capital securities in January 2020,” the company said.

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

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.

JFC said earlier that it has mandated Citigroup, Goldman Sachs, J.P. Morgan and Morgan Stanley as joint global coordinators, and Citigroup, Goldman Sachs, J.P. Morgan, Morgan Stanley, BPI Capital Corp., Credit Suisse and UBS as joint lead managers and joint bookrunners to arrange a series of fixed income investor calls which commenced on June 17.

The company said it has sufficient cash, P26.5 billion as of March 31, and liquidity to support its operations on a continuing basis and meet all its obligations.

JFC earlier reported a net loss of P1.8 billion in the first quarter of 2020, a reversal from a P1.5 billion net profit in the same period a year ago, due to the start of lockdowns caused by the COVID-19 pandemic.

As of March, when Luzon was placed under enhanced community quarantine to control the pandemic, Jollibee was forced to shut down 69 percent of its stores in the Philippines, six percent of its restaurants in China, 23 percent in Europe, Middle East and Africa, and 16 percent in North America.

The company said it expects business to start recovering in the third and fourth quarters, with recovery at a slow pace.