Jollibee plans to sell up to P8-B in preferred shares

Jollibee [JFC 260.00, down 1.5%] [link] announced its plan to sell an additional 5 million to 8 million preferred shares at P1000/share, in a follow-on offering to raise between P5 billion and P8 billion. The preferred shares will be offered as a 2nd tranche of its existing shelf registration for 20 million preferred shares; JFC sold 12 million shares under its first tranche (Series A and Series B) back in 2021. JFC said that it would use the money raised to “maintain strong capital structure, robust leverage position, and optimize liquidity” by “managing maturities of financial obligations.”

MB bottom-line: That’s a lot of fancy talk to say that they’re raising money to pay debts. JFC said that a portion of the money raised in this 2nd tranche sale would go to “refinance financial obligations”, and mentioned specifically exercising its option to call its Series A prefs from the 1st tranche sale that are due this October. Not that exciting, but the new prefs are likely to carry a much higher dividend rate than the first tranche, where Series A carried a ~3.2% rate and Series B carried a ~4.2% rate! Remember when a 4% dividend rate was good? 2021 feels like a few lifetimes ago.

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