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Yum! Brands, Inc. Announces New Securitization Financing Facility

LOUISVILLE, Ky., Apr 21, 2016 (BUSINESS WIRE) -- Yum! Brands, Inc. YUM, -1.01% (the “Company”) today announced that it plans to refinance the Company’s unsecured term loan facility (the “Bridge Facility”) with a new securitization financing facility, issued by newly formed subsidiaries of Taco Bell (the “Securitization Financing”). The Bridge Facility currently has outstanding borrowings of approximately $2.0 billion. The Securitization Financing is expected to be comprised of at least $2.0 billion of senior term notes securitizing the Taco Bell U.S. royalties. The net proceeds of the Securitization Financing are expected to be used for repayment of the Bridge Facility, payment of transaction costs associated with the refinancing and for general corporate purposes.

A key aspect of the Company’s strategy is to optimize its capital structure. Consistent with that, the Securitization Financing is yet another milestone in our previously communicated plan of targeting total companywide leverage of approximately 5.0X EBITDA and returning a total of $6.2 billion of capital to shareholders prior to the separation of our China business. As the next step in this plan, subsidiaries that operate our KFC, Pizza Hut and Taco Bell (excluding the Taco Bell subsidiaries included in the Securitization Financing) businesses will enter into a new senior secured credit facility and issue new high-yield notes, which will be guaranteed by certain of our domestic subsidiaries and, in case of the new credit facility, secured by certain assets of the obligors. Our legacy publicly-traded notes will remain in place as unsecured obligations of the Company.

The Securitization Financing, as well as the new credit facility and high-yield notes mentioned above, are subject to market and other conditions and are anticipated to close in the second quarter of 2016. However, there can be no assurance that the Company will be able to successfully complete the transactions, on the terms described above, or at all.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities...


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