The Philippines’ largest food service company Jollibee Foods Corporation made its debut in the international bond market, pricing on January 16 a US$600 million offering. This also marks the first time that Jollibee has accessed the capital markets since its initial public offering in 1993 and the issuance is likewise one of the first by an Asian restaurant company.
The Reg S perpetual non-call five-year securities were priced at par with a similar coupon and re-offer yield of 3.90%. Issued through Jollibee Worldwide Pte Limited, the transaction was oversubscribed by almost 10x of the original intended issue amount of US$400 million, allowing the company to upsize the deal to US$600 million and tighten the final pricing by 35bp from the initial price guidance of 4.25%. This represents the lowest pricing for five-year perpetual securities issued by a Philippine company, reflecting the strong investor demand.
The unrated bond will be callable at year five, while the coupon will be reset every five years at the prevailing five-year US treasury plus an initial credit spread and a step-up margin of 250bp, if not called.
Proceeds from the offering are intended primarily to refinance the short-term debt from Jollibee’s acquisition of International Coffee and Tea, which was completed in September 2019, as well as to fund initiatives aligned with Jollibee’s general corporate purposes.
The issuance is also designed to further strengthen the company’s balance sheet and 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.
To execute the transaction, Jollibee conducted a series of fixed income investor meetings in Hong Kong, Singapore and London commencing on January 13. Citi and J.P. Morgan were the joint global coordinators for the transaction as well as joint bookrunners and lead managers along with Credit Suisse and Mizuho Securities, while BPI Capital Corporation, China Bank Capital Corporation and PNB Capital and Investment Corporation acted as joint domestic managers.
