Yum! Brands Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
| UNITED STATES |
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, D. C. 20549 |
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 26, 2024, Pizza Hut Holdings, LLC, KFC Holding Co. and Taco Bell of America, LLC (collectively, the “Borrowers”), each a wholly owned subsidiary of YUM! Brands, Inc. (“YUM” or the “Company”), entered into a Refinancing Amendment No. 7 (the “Amendment”) to the Credit Agreement, dated as of June 16, 2016 (as amended by Refinancing Agreement No. 1 dated as of March 21, 2017, Refinancing Amendment No. 2 dated as of June 7, 2017, Refinancing Amendment No. 3 dated as of April 3, 2018, Refinancing Amendment No. 4 dated as of March 15, 2021, Amendment No. 5 dated as of January 1, 2022 and Amendment No. 6 dated as of June 28, 2023, and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrowers, JPMorgan Chase Bank, N.A., as Collateral Agent, Swing Line Lender, an L/C Issuer and Administrative Agent, and the Lenders from time to time party thereto, pursuant to which the Company refinanced its existing approximately $713 million term loan A facility and $1.25 billion revolving facility through the issuance of a $500 million term loan A (the “Term A Loan”) and a $1.5 billion revolving credit facility (the “Revolving Facility”). The Term A Loan and the Revolving Facility will mature on the earliest of (i) April 26, 2029, (ii) the date that is 91 days prior to the maturity of the Borrowers’ existing term loan B if more than $250 million of such term loan B remains outstanding as of such date and (iii) the date that is 91 days prior to the maturity of the Borrowers’ existing senior notes if more than $250 million of such senior notes remains outstanding as of such date. The interest rates applicable to the Term A Loan and to borrowings under the Revolving Facility are unchanged by the Amendment, and will continue to be based on either Adjusted Term SOFR or the base rate, as determined by the Borrowers, plus a spread based on the Borrowers’ total leverage ratio. Such spread is initially 0.75% for Adjusted Term SOFR loans and 0.00% for base rate loans and ranges between 0.75% and 1.50% for Adjusted Term SOFR loans and between 0.00% and 0.50% for base rate loans based on the total leverage ratio. The “base rate” means the greatest of (a) the Prime Rate then in effect, (b) the federal funds rate then in effect plus 0.5% and (c) the rate for one month Adjusted Term SOFR rate then in effect plus 1.0%. The Term A Loan will amortize at 2.5% per annum during the second and third years following closing and at 5.0% per annum during the fourth and fifth years following closing. The Amendment removes the excess cash flow mandatory prepayment requirement with respect to the Term A Loan and removes the most-favored-nation requirement as applicable to the Term A Loan in connection with incremental credit extensions. The Amendment also includes an increase to the swing line sublimit. All other material provisions of the Credit Agreement remain unchanged. The Credit Agreement contains customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, bankruptcy or insolvency proceedings, change of control and cross-acceleration in respect of other material debt agreements.
The description of the Amendment and the Credit Agreement set forth above is a summary only, is not complete and is qualified in its entirety by reference to the full and complete terms contained in the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is hereby incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
| Exhibit No. |
Description
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| 10.1 | Refinancing Amendment No. 7, dated as of April 26, 2024, to Credit Agreement dated as of June 16, 2016 among Pizza Hut Holdings, LLC, KFC Holding Co. and Taco Bell of America, LLC, as borrowers, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Collateral Agent, Swing Line Lender, an L/C Issuer and Administrative Agent for the Lenders. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| YUM! BRANDS, INC. | |||
| (Registrant) | |||
| Date: | April 26, 2024 | /s/ Chris Turner | |
| Chris Turner | |||
| Chief Financial Officer |