{"id":1921781,"date":"2023-04-30T23:41:55","date_gmt":"2023-05-01T03:41:55","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/exclusive-subway-comes-up-with-debt-plan-to-clinch-10-billion-plus-sale\/"},"modified":"2023-04-30T23:48:29","modified_gmt":"2023-05-01T03:48:29","slug":"exclusive-subway-comes-up-with-debt-plan-to-clinch-10-billion-plus-sale","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/exclusive-subway-comes-up-with-debt-plan-to-clinch-10-billion-plus-sale\/","title":{"rendered":"Exclusive-Subway comes up with debt plan to clinch $10 billion-plus sale"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fexclusive-subway-comes-up-with-debt-plan-to-clinch-10-billion-plus-sale%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1921781&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"entry-content\">\n<h2>Subway Sale Process: Private Equity Firms Offer $5 Billion Acquisition Financing Plan<\/h2>\n<p>By Abigail Summerville and Anirban Sen<\/p>\n<p>The bankers running the sale process for Subway have given the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/elizabeth-warren-calls-on-sec-to-investigate-potential-market-manipulation-cautions-against-internet-trading-schemes-a-flash-mob-with-money\/\" title=\"Elizabeth Warren Calls On SEC To Investigate Potential \u2018Market Manipulation,\u2019 Cautions Against \u2018Internet Trading Schemes,\u2019 \u2018A Flash Mob With Money\u2019\">private equity firms<\/a> vying for the sandwich chain a $5 billion acquisition financing plan, hoping to overcome a challenging environment for leveraged buyouts and fetch the company\u2019s asking price of more than $10 billion, people familiar with the matter said.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">\n\t\t\t<script>googletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });<\/script>\n\t\t<\/div>\n<p>Interest rates have been rising and concerns about an economic slowdown have increased since Subway said in February it was exploring a sale, making debt more expensive and less available for buyout firms pursuing deals. This is weighing on how much the private equity firms are offering to buy companies.<\/p>\n<p>So far, bids for Subway have ranged between $8.5 billion and $10 billion, one of the sources said. Subway\u2019s financial adviser, JPMorgan Chase &#038; Co, is now hoping a $5 billion debt financing package it has put forward will show buyout firms they can borrow enough to structure an attractive deal even at a $10 billion-plus valuation, the sources said.<\/p>\n<ul>\n<li>The debt financing is based on a mix of loans and bonds<\/li>\n<li>Its size is equivalent to 6.75 times Subway\u2019s 12-month earnings before interest, taxes, depreciation and amortization of about $750 million, the sources added.<\/li>\n<\/ul>\n<p>It is possible that this financing will serve only as a temporary solution. This is because a cheaper option for a private-equity buyer of Subway would likely be to finance the acquisition long-term through a so-called whole business securitization (WBS), the sources said. This would involve borrowing using the royalties of restaurant franchises as collateral.<\/p>\n<h3>Barclays Plc in Discussions for Long-Term Financing<\/h3>\n<p>WBS financing requires store-by-store due diligence by ratings agencies which can take more than a year. Bidders would have to rely on JPMorgan\u2019s debt package or arrange their own financing to clinch a deal with Subway, and then refinance through a WBS scheme down the line, the sources said.<\/p>\n<p>Barclays Plc, a major player in the market for WBS financing, is one of the banks in discussions about <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/social-security-to-become-insolvent-in-10-years-if-no-legislative-action-taken-officials-warn\/\" title=\"Social Security to become insolvent in 10 years if 'no legislative action' taken, officials warn\">long-term financing<\/a>, the sources said.<\/p>\n<p>Milford, Connecticut-based Subway has been revamping its operations to deal with outdated decor and $5 deals on foot-long sandwiches that eroded franchisees\u2019 profits. In 2021, the chain launched a menu overhaul and splashy marketing campaign as it embarked on a turnaround plan that has helped sales grow.<\/p>\n<p>JPMorgan\u2019s financing package also offers the option of a preferred equity component with a roughly 15% interest rate, the sources said. This is a more expensive route that private equity firms may not opt for, three of the sources added.<\/p>\n<p>To be sure, Subway is allowing bidders to use any financing route they want, as long as they can show they can secure committed financing.<\/p>\n<p>Second-round bids for Subway came in last week from more than 10 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/elon-musk-says-hell-take-company-public-again-a-few-years-after-buyout\/\" title=\"Elon Musk Says He\u2019ll Take Company Public Again a Few Years After Buyout\">private-equity firms<\/a>, one of the sources said, adding that Subway has dropped low bids and is whittling down the pool of final bidders. Bain Capital, TPG Inc, Advent International Corp, TDR Capital, Goldman Sachs Group Inc\u2019s buyout arm and Roark Capital are among the private-equity firms that are participating in the auction, according to the sources.<\/p>\n<p>Subway will soon allow bidders to team up before submitting final offers, and Bain, TPG and Advent have already been in discussions about doing so, the sources added.<\/p>\n<p>The sources requested anonymity because details of the sale process are confidential. Bain, TPG and Advent declined to comment. TDR and Roark did not immediately respond to comment requests. Subway, JPMorgan, Goldman Sachs and Barclays declined to comment.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Abigail Summerville and Anirban Sen NEW YORK (Reuters) \u2013 The bankers running the sale process for Subway have given the private equity firms vying for the sandwich chain a $5 billion acquisition financing plan, hoping to overcome a challenging environment for leveraged buyouts and fetch the company\u2019s asking price of more than $10 billion<\/p>\n","protected":false},"author":66,"featured_media":1921782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[10491,25486,13017,5487,25485,4025,4340],"class_list":["post-1921781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann","tag-10491","tag-billion-plus","tag-clinch","tag-debt","tag-exclusive-subway","tag-plan","tag-sale"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1921781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1921781"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1921781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1921782"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1921781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1921781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1921781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}