Subway’s $5 billion debt plan for $10 billion sale

Subway, the American fast-food chain, has provide you with a $5 billion debt plan to safe a $10 billion-plus sale, in accordance with a report by Reuters. The plan is a part of the corporate’s efforts to restructure its enterprise and cut back its debt load because it seeks to draw consumers. The transfer comes amid a difficult surroundings for the restaurant trade, which has been hit laborious by the COVID-19 pandemic.

Subway’s debt plan features a $2.5 billion mortgage from banks led by JPMorgan Chase & Co. and Goldman Sachs Group Inc., and a $2.5 billion bond providing, in accordance with nameless sources cited within the Reuters report. The bond providing is predicted to be break up into two components: a $1.5 billion tranche that matures in seven years and a $1 billion tranche that matures in 10 years. The corporate plans to make use of the proceeds to repay current debt and to fund different company functions.

The transfer is seen as an try and make itself extra engaging to potential consumers. The corporate has been in search of a purchaser for a number of months, with stories suggesting that it has been in talks with non-public fairness companies and different potential consumers. Subway’s founder, Fred DeLuca, died in 2015, and the corporate has struggled in recent times to maintain up with altering shopper tastes and the rise of rivals corresponding to Chipotle and Panera Bread.

Subway’s debt load has additionally been a priority for potential consumers. The corporate had round $8 billion in debt as of 2020, in accordance with Moody’s Traders Service. Moody’s has additionally given Subway a credit standing of Caa1, which is taken into account speculative and signifies a excessive danger of default.

The COVID-19 pandemic has added to Subway’s challenges. The corporate has been hit laborious by the pandemic, with lots of its franchisees struggling to remain afloat amid lockdowns and decreased foot site visitors. Subway has additionally been criticized for its dealing with of the pandemic, with some franchisees accusing the corporate of not doing sufficient to help them.

Regardless of these challenges, Subway stays a significant participant within the fast-food trade. The corporate has greater than 23,000 eating places in the USA and over 100 international locations worldwide. Subway has additionally been making efforts to adapt to altering shopper tastes, corresponding to by introducing new menu objects and providing supply and cell ordering.

The sale of Subway is more likely to be intently watched by trade observers. The restaurant trade has been present process vital adjustments in recent times, with shoppers more and more demanding more healthy and extra sustainable choices. The COVID-19 pandemic has additionally accelerated traits corresponding to supply and on-line ordering, that are more likely to have a long-lasting impression on the trade.

Subway’s debt plan features a $2.5 billion mortgage from banks led by JPMorgan Chase & Co. and Goldman Sachs Group Inc., and a $2.5 billion bond providing, in accordance with nameless sources cited within the Reuters report. The bond providing is predicted to be break up into two components: a $1.5 billion tranche that matures in seven years and a $1 billion tranche that matures in 10 years. The corporate plans to make use of the proceeds to repay current debt and to fund different company functions.

The transfer is seen as an try by Subway to make itself extra engaging to potential consumers. The corporate has been in search of a purchaser for a number of months, with stories suggesting that it has been in talks with non-public fairness companies and different potential consumers. Subway’s founder, Fred DeLuca, died in 2015, and the corporate has struggled in recent times to maintain up with altering shopper tastes and the rise of rivals corresponding to Chipotle and Panera Bread.

Subway’s debt load has additionally been a priority for potential consumers. The corporate had round $8 billion in debt as of 2020, in accordance with Moody’s Traders Service. Moody’s has additionally given Subway a credit standing of Caa1, which is taken into account speculative and signifies a excessive danger of default.

The COVID-19 pandemic has added to Subway’s challenges. The corporate has been hit laborious by the pandemic, with lots of its franchisees struggling to remain afloat amid lockdowns and decreased foot site visitors. Subway has additionally been criticized for its dealing with of the pandemic, with some franchisees accusing the corporate of not doing sufficient to help them.

Regardless of these challenges, Subway stays a significant participant within the fast-food trade. The corporate has greater than 23,000 eating places in the USA and over 100 international locations worldwide. Subway has additionally been making efforts to adapt to altering shopper tastes, corresponding to by introducing new menu objects and providing supply and cell ordering.

The sale of Subway is more likely to be intently watched by trade observers. The restaurant trade has been present process vital adjustments in recent times, with shoppers more and more demanding more healthy and extra sustainable choices. The COVID-19 pandemic has additionally accelerated traits corresponding to supply and on-line ordering, that are more likely to have a long-lasting impression on the trade.