Thursday, January 9, 2020

JOLLIBEE to Pay its COFFEE BEAN AND TEA LEAF Purchase Loans Through Income Securities Offering

Ask any Filipino about Jollibee and there is no doubt that not only would they know about it, they most certainly have eaten at one of its branches and they would choose it first over even international fast-food chains like McDonald’s. Not only has Jollibee Foods Corporation (JFC) proven its marketing mettle against global competition by opening branches around the world, it has also been acquiring both local and overseas food franchises to complement its main Jollibee brand. One surprise purchase from last year was the American coffee chain and Starbucks competitor, The Coffee Bean and Tea Leaf. This acquisition required substantial purchase loans, which JFC has plans to pay.

The Manila Bulletin has it that Jollibee Foods Corporation is looking to refinance its purchase loans used for acquiring The Coffee Bean and Tea Leaf (CBTL) last 2019 by issuing fixed income securities via Jollibee Worldwide Pte. Ltd. (JWPL), in order to raise capital. This was revealed in a disclosure by JFC to the Philippine Stock Exchange. With regards to the planned issuance of income securities, the country’s biggest fast-food company gave the mandate of joint global coordinators to J.P. Morgan SEA Ltd. and Citigroup Global Markets Singapore Pte. Ltd.

To this end, Citigroup and J.P. Morgan will do fixed investor meetings for parties interested in JWPL income securities starting on January 13, at Singapore, Hong Kong and London. They will be working together with Mizuho Securities and Credit Suisse who have also been named joint book-runners and joint lead managers to oversee the securities offering. Jollibee notes that the proceeds that will be gotten from these investor meetings will go to refinance short-term debts that were gained from the acquisition of CBTL, which was finalized in September last year. Anything beyond that will then be funneled into funding initiatives for Jollibee’s general corporate purposes.

The Coffee Bean and Tea Leaf, headquartered in Los Angeles, was acquired in full by Jollibee Foods Corporation for $350 million, which was financed by a bridge loan through its Jollibee Worldwide subsidiary. The JFC stock exchange disclosure notes, “The securities will be accounted for as equity, and will strengthen the balance sheet of the Guarantor, in line with its policy of prudent financial management.”

Image courtesy of Philippine Star


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