YUM · 10-Q · 2026Q3 · Full report

Interest Rate and Refinancing Exposure

YUM BRANDS INC · 2026-11-06 · Importance 50 · Surprise 24 · In source text

As of September 30, 2026, approximately 97% of YUM Brands’ $11.5 billion of total debt outstanding, including the impact of interest rate swaps, was fixed at an effective overall interest rate of approximately 4.5%. The Company expects to maintain net leverage of approximately 4.0x EBITDA over the medium term. Because $750 million of Subsidiary Senior Unsecured Notes mature June 1, 2027, the Term Loan A Facility and Revolving Facility could mature less than 12 months after September 30, 2026 unless at least $500 million of those notes is paid or refinanced by 91 days before that date; the Company expects to refinance the $750 million before then, with April 26, 2029 reflected as the facilities’ anticipated repayment date.

Key facts

• If YUM has not paid or refinanced at least $500 million of Subsidiary Senior Unsecured Notes 91 days before June 1, 2027, the Term Loan A Facility and Revolving Facility mature less than 12 months from the September 30, 2026 balance-sheet date; their outstanding borrowings were classified as short-term. source
• The Term Loan A Facility and Revolving Facility will mature less than 12 months from September 30, 2026, if YUM BRANDS INC has not paid or refinanced at least $500 million of the $750 million in Subsidiary Senior Unsecured Notes outstanding 91 days before June 1, 2027. source
• YUM BRANDS INC expects to refinance the $750 million of existing Subsidiary Senior Unsecured Notes before 91 days prior to June 1, 2027. source
• YUM used interest rate swaps to fix the rate on $1.5 billion of borrowings, primarily under its Term Loan B Facility, through March 2028; the swapped portion's current rate was 5.09%. source
• As of September 30, 2026, approximately 97% of YUM BRANDS INC's $11.5 billion of total debt outstanding (excluding the Revolving Facility balance, finance leases, and debt issuance costs and discounts) was fixed, including the impact of interest rate swaps, at an effective overall interest rate of approximately 4.5%. source
• The Term Loan A Facility and Revolving Facility mature on the earliest of April 26, 2029, or dates tied to the March 15, 2028 Term Loan B and June 1, 2027 Subsidiary Senior Unsecured Notes maturities. source
• YUM BRANDS INC's Term Loan A Facility and Revolving Facility have an anticipated repayment date of April 26, 2029, based on its expected refinancing of the existing Subsidiary Senior Unsecured Notes. source
• YUM had an estimated net gain in AOCI from interest rate swaps expected to be reclassified into earnings in the next 12 months, based on current SOFR rates. source

Impact estimates