Jollibee lowers cost of $300-M bond issuance

MANILA, Philippines — Homegrown fast-food giant Jollibee Foods Corp. (JFC) was able to tighten the price of its $300-million bond offer as its return to the US dollar debt market was welcomed by high demand from investors.

The Tony Tan Caktiong-led company disclosed to the stock exchange on Wednesday that its five-year Regulation S senior unsecured notes would have a fixed rate of 5.332 percent, payable twice yearly.

According to JFC, the final order book exceeded $2 billion on the back of both international and domestic support, “a testament to investors’ confidence in JFC’s compelling credit story and global market appeal.”

Lower cost

Strong demand allowed JFC to lower the rates by 35 basis points (bps) from the initial price guidance, resulting in lower borrowing costs for the company.

READ: JFC to tap offshore debt market to fund expansion

The company said the resulting price represented a 125-bps spread over the five-year US Treasury.

Regulation S notes are debt securities offered and sold outside the United States. While JFC’s notes are unsecured, this will allow investors to have a higher claim in case of bankruptcy.

The bonds will be issued by JFC’s subsidiary, Jollibee Worldwide Pte. Ltd., and listed on the Singapore Exchange Securities Trading Ltd.

To repay loan

JFC chief financial officer Richard Shin told reporters in a recent press briefing that proceeds from the offer would be used to repay a short-term loan it had used to partially fund the redemption of a $396-million perpetual bond.

This marks JFC’s first dollar-denominated bond offer since 2020, with the issuance garnering “significant investor appetite.” The company is also the first Philippine firm to tap the international bond market this year.

Earlier, JFC announced plans to spend up to P21 billion this year to open as many as 800 stores across its brands, which include the flagship Jollibee and international brands like Smashburger, Compose Coffee and Tim Ho Wan.