Yum Brands Inc , owner of Pizza Hut, KFC and Taco Bell restaurant chains, sold US$600 million in bonds on Monday, reopening the U.S. market for junk-rated debt issues after its longest lull since the 2008 financial crisis.
Yum's bond offering represented a glimmer of investor demand in one the riskiest corners of the corporate credit market, which seized up for much of March after the coronavirus outbreak morphed into an economically devastating pandemic.While U.S. companies last week issued new investment-grade debt at a record clip, there had been no new issuance in the so-called high-yield market for junk-rated debt issuers since March 4.
The company sold bonds maturing in 2025 at a 7.75per cent yield. By comparison, Yum raised US$800 million in September through 10-year debt with a yield of 4.75per cent. The higher the yield, the more expensive the bond is for the company.AdvertisementThe Federal Reserve said last week it will backstop the investment-grade market but has made no such pledge for high-yield debt.
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