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Yum! Brands Announces Cash Tender Offers For Up To $525 Million Aggregate Principal Amount Of Five Series Of Its Outstanding Debt Securities

Yum! Brands, Inc. (NYSE: YUM) today announced that it has commenced cash tender offers to purchase up to $525 million combined aggregate principal amount of five series of its outstanding debt securities. The tender offers are consistent with Yum! Brands’ on-going debt management strategy and aim to take advantage of historically low interest rates to issue senior notes at lower rates and use proceeds to buy back existing debt, reducing annual interest expense and extending the average maturity of its long-term debt. The terms and conditions of the tender offers are set forth in an Offer to Purchase dated today and a related Letter of Transmittal.

Pursuant to the Offer to Purchase dated October 22, 2013, Yum! Brands is offering to purchase, subject to certain conditions, up to $525 million combined aggregate principal amount of its 6.875% Senior Notes due 2037, 6.250% Senior Notes due 2018, 6.250% Senior Notes due 2016, 5.300% Senior Notes due 2019, and 4.250% Senior Notes due 2015 (collectively, the “notes”), subject to the Tender Sub-Caps and applicable Acceptance Priority Levels specified in the table below:

               

Title of Security (CUSIP Number)

Principal Amount Outstanding

Tender Sub-Cap

Acceptance Priority Level

Fixed Spread (basis points)

Reference U.S. Treasury Security

Bloomberg Reference Page

Early Tender Payment

Hypothetical Total Consideration* (a)

                                 

6.875% SeniorNotes due 2037(988498 AD3)

$600,000,000 $250,000,000 1 165

2.875%U.S.TreasuryNote due05/15/2043

PX1 $50 $1,202.55
 

6.250% SeniorNotes due 2018(988498 AC5)

$600,000,000 N/A 2 40

1.375%U.S.TreasuryNote due09/30/2018

PX1 $50 $1,185.80
 

6.250% SeniorNotes due 2016(988498 AB7)

$300,000,000 N/A 3 25

0.625%U.S.TreasuryNote due10/15/2016

PX1 $50 $1,127.59
 

5.300% SeniorNotes due 2019(988498 AF8)

$250,000,000 N/A 4 145

1.375%U.S.TreasuryNote due09/30/2018

PX1 $50 $1,132.60
 

4.250% SeniorNotes due 2015(988498 AE1)

$250,000,000 N/A 5 30

0.25%U.S.TreasuryNote due09/30/2015

PX1 $50 $1,065.66
 

*

Per $1,000 principal amount of notes accepted for purchase.

 

(a)

Hypothetical Total Consideration is based on the Reference Yield (as defined in the Offer to Purchase) of the Reference Security (as set forth above) as of 2:00 p.m., New York City time, on October 21, 2013 and a Settlement Date (as defined in the Offer to Purchase) of November 20, 2013. The actual Reference Yields of the Reference Securities will be determined by the Lead Dealer Managers based on certain quotes available at 2:00 p.m., New York City time, on the Price Determination Date (as defined in the Offer to Purchase), which is expected to be November 5, 2013.

 

Each tender offer will expire at the “Expiration Time,” which is 11:59 p.m. New York City time on November 19, 2013, unless extended. Holders of notes subject to the tender offers must validly tender and not validly withdraw their notes on or before the “Early Tender Time,” which is 5:00 p.m., New York City time, on November 4, 2013, unless extended, to be eligible to receive the Total Consideration (as described below). Holders of notes who validly tender their notes after the Early Tender Time but at or prior to the Expiration Time whose notes are accepted for purchase will receive the Tender Offer Consideration, which is equal to the Total Consideration minus the Early Tender Payment of $50 per $1,000 principal amount of notes accepted for purchase. Holders of notes subject to the tender offers who tender their notes prior to the Early Tender Time may not withdraw their notes after the Early Tender Time, except in limited circumstances where additional withdrawal rights are required by law. Holders of notes subject to the tender offers who tender their notes after the Early Tender Time may not withdraw their notes at any time, except in limited circumstances where additional withdrawal rights are required by law. The Total Consideration for each $1,000 principal amount of notes tendered and accepted for purchase pursuant to the tender offers will be determined in the manner described in the Offer to Purchase dated October 22, 2013 by reference to a fixed spread specified for each series of the notes over the yield based on the bid side price of the U.S. Treasury Security specified in the table above, as quoted on the applicable Bloomberg Reference Page at 2:00 p.m., New York City time, on November 5, 2013. Holders whose notes are accepted for purchase pursuant to the tender offers will also receive accrued and unpaid interest on their purchased notes from the last interest payment date for such notes to, but excluding, the Settlement Date. Subject to the terms and conditions of the tender offer, the Settlement Date will follow promptly after the Expiration Time and currently is expected to be November 20, 2013.

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