Restaurant Brands International Inc. Announces Launch of First Lien Senior Secured Notes Offering

Rhea-AI Summary

Restaurant Brands International Inc. (RBI) has announced the launch of a $500 million First Lien Senior Secured Notes offering due 2029. The company plans to use the proceeds, along with cash on hand, to redeem its outstanding 5.750% First Lien Senior Secured Notes due 2025. The new Notes will be guaranteed by Restaurant Brands International Partnership and its wholly-owned subsidiaries that guarantee the Issuers' existing senior secured credit facilities. The offering is targeted at qualified institutional buyers in the U.S. and international investors, with the Notes not being registered under the Securities Act.

Positive

• Refinancing existing debt with new notes, potentially at more favorable terms
• Strong backing with guarantees from parent company and subsidiaries
• Targeting qualified institutional buyers, indicating investor confidence

Negative

• Maintaining high debt levels with $500 million new notes issuance
• Potential increase in interest expenses depending on new notes' terms

Financial Analyst

Restaurant Brands International's $500 million notes offering is a strategic move to refinance existing debt. By replacing the 5.750% 2025 Notes with new First Lien Senior Secured Notes due 2029, RBI is likely aiming to extend its debt maturity and potentially secure more favorable terms. This approach can improve cash flow management and provide financial flexibility. However, the impact on the company's overall leverage and interest expenses remains to be seen, depending on the new notes' interest rate. Investors should monitor how this refinancing affects RBI's debt-to-EBITDA ratio and interest coverage ratio in upcoming financial reports.

Legal Expert

The structured offering of these notes complies with Rule 144A and Regulation S of the Securities Act, targeting qualified institutional buyers and non-U.S. persons. This approach allows RBI to access capital markets efficiently while avoiding the more time-consuming and costly process of public registration. The first lien senior secured status of the notes, coupled with guarantees from RBI's subsidiaries, provides strong protection for noteholders. However, investors should be aware that these notes are not registered and thus have transferability. The legal structure of this offering balances RBI's need for capital with investor protection, but requires careful consideration of the associated risks and limitations.

TORONTO, Sept. 3, 2024 /PRNewswire/ - Restaurant Brands International Inc. ("RBI") (TSX: QSR) (NYSE: QSR) (TSX: QSP), 1011778 B.C. Unlimited Liability Company (the "Issuer") and New Red Finance, Inc. (the "Co-Issuer" and, together with the Issuer, the "Issuers") announced today that the Issuers have launched an offering of $500 million in aggregate principal amount of First Lien Senior Secured Notes due 2029 (the "Notes").

RBI expects to use the proceeds from the offering of the Notes, together with cash on hand, to redeem in full the Issuers' outstanding 5.750% First Lien Senior Secured Notes due 2025 (the "2025 Notes") and pay related fees and expenses. The Issuers expect to redeem $500 million in aggregate principal amount of 2025 Notes. This press release does not constitute a notice of redemption with respect to the 2025 Notes.

The Notes will be first lien senior secured obligations of the Issuers, guaranteed fully and unconditionally, and jointly and severally, on a first lien senior secured basis by Restaurant Brands International Limited Partnership ("Holdings") and each of Holdings' wholly-owned subsidiaries that also guarantee the Issuers' obligations under the Issuers' existing senior secured credit facilities.

The Notes will be offered (i) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and (ii) outside the U.S. pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been and will not be registered under the Securities Act and may not be offered or sold in the U.S. absent registration or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Restaurant Brands International

Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with over $40 billion in annual system-wide sales and over 30,000 restaurants in more than 120 countries and territories. RBI owns four of the world's most prominent and iconic quick service restaurant brands - TIM HORTONS®, BURGER KING®, POPEYES®, and FIREHOUSE SUBS®. These independently operated brands have been serving their respective guests, franchisees and communities for decades. Through its Restaurant Brands for Good framework, RBI is improving sustainable outcomes related to its food, the planet, and people and communities.

Forward-Looking Statements

This press release includes forward-looking statements, which are often identified by the words "may," "might," "believes," "thinks," "anticipates," "plans," "expects," "intends" or similar expressions, and reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements include statements about RBI's expectations regarding the issuance of the Notes and the use of proceeds therefrom. The factors that could cause actual results to differ materially from RBI's expectations are detailed in filings of RBI with the U.S. Securities and Exchange Commission and on SEDAR+ in Canada, such as its annual and quarterly reports and current reports on Form 8-K, and include the following: (1) RBI's substantial indebtedness, which could adversely affect RBI's financial condition and prevent it from fulfilling its obligations; (2) global economic or other business conditions that may affect the desire or ability of RBI's customers to purchase RBI's products, such as inflationary pressures, high unemployment levels, declines in median income growth, consumer confidence and consumer discretionary spending and changes in consumer perceptions of dietary health and food safety; (3) RBI's relationship with, and the success of, RBI's franchisees and risks related to RBI's nearly fully franchised business model; (4) RBI's franchisees' financial stability and their ability to access and maintain the liquidity necessary to operate their businesses; (5) RBI's supply chain operations; (6) RBI's ownership and leasing of real estate; (7) the effectiveness of RBI's marketing, advertising and digital programs and franchisee support of these programs; (8) significant and rapid fluctuations in interest rates and in the currency exchange markets and the effectiveness of RBI's hedging activity; (9) RBI's ability to successfully implement RBI's domestic and international growth strategy for each of RBI's brands and risks related to RBI's international operations; (10) RBI's reliance on franchisees, including subfranchisees to accelerate restaurant growth; (11) unforeseen events such as pandemics; (12) the ability of the counterparties to RBI's credit facilities' and derivatives' to fulfill their commitments and/or obligations; (13) changes in applicable tax laws or interpretations thereof, and RBI's ability to accurately interpret and predict the impact of such changes or interpretations on RBI's financial condition and results; (14) evolving legislation and regulations in the area of franchise and labor and employment law; (15) RBI's ability to address environmental and social sustainability issues; (16) risks related to the conflict between Russia and Ukraine, and the conflict in the Middle East; and (17) softening in the consumer environment. Other than as required under U.S. federal securities laws or Canadian securities laws, RBI undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

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SOURCE Restaurant Brands International Inc.

FAQ

What is the purpose of Restaurant Brands International's (QSR) $500 million notes offering?

The purpose is to redeem in full the company's outstanding 5.750% First Lien Senior Secured Notes due 2025 and pay related fees and expenses.

When are Restaurant Brands International's (QSR) new First Lien Senior Secured Notes due?

The new Notes are due in 2029.

Who is guaranteeing Restaurant Brands International's (QSR) new Notes offering?

The Notes are guaranteed by Restaurant Brands International Partnership and its wholly-owned subsidiaries that also guarantee the Issuers' existing senior secured credit facilities.

Are Restaurant Brands International's (QSR) new Notes registered under the Securities Act?

No, the Notes and related guarantees have not been and will not be registered under the Securities Act.