01—Abstract
Summary
Summary of the 8-K filed September 30, 2025. Cited figures are marked; the original filing is the authoritative source.
On September 24, 2025, Taco Bell Funding, LLC, a special purpose subsidiary of Taco Bell Corp., completed a refinancing by issuing $1,000 milliona of Series 2025-1 4.821% Fixed Rate Senior Secured Notes, Class A-2-I, and $500 million of Series 2025-1 5.049% Fixed Rate Senior Secured Notes, Class A-2-II, in an offering exempt from Securities Act registration.
Net proceeds were used to repay in full the Series 2016-1 Class A-2-III Notes, of which $938 millionb was outstanding, with remaining proceeds distributed to Taco Bell Corp. for transaction expenses and general corporate purposes, including purchases of franchised restaurants. The notes are secured by substantially all assets of the issuer and its securitization entities, including U.S. Taco Bell franchise and license agreements, royalties, and intellectual property. They are not guaranteed by YUM!
Brands, Inc. or its other subsidiaries. The filing states anticipated repayment dates of August 2030 for the Class A-2-I notes and August 2032 for the Class A-2-II notes, with a legal final maturity in August 2055. If the notes are not repaid by their anticipated repayment dates, additional interest accrues at a rate set by the servicer, with a floor of 5.0%c per annum plus specified spreads.
The Second Amended and Restated Base Indenture and related Management Agreement also amended several terms, including leverage-based conditions for issuing additional notes, Manager Termination Event thresholds, the Back-Up Manager's expense cap, and the permitted scope of the Competitor definition, many of which take effect once the 2016-1, 2018-1 and 2021-1 Class A-2 notes are no longer outstanding. For investors, the transaction is a securitization refinancing that replaces $938 milliond of existing notes with $1.5 billion of new notes at fixed coupons, with recourse limited to the Taco Bell securitized royalty streams and related assets rather than the parent company.
02—Key points
Key Highlights
- Taco Bell Funding, LLC issued $1,000 million of 4.821% Series 2025-1 Class A-2-I Notes and $500 million of 5.049% Series 2025-1 Class A-2-II Notes on September 24, 2025.
- Net proceeds were used to repay in full the Series 2016-1 Class A-2-III Notes, of which $938 million was outstanding.
- Anticipated repayment dates are August 2030 (Class A-2-I) and August 2032 (Class A-2-II), with a legal final maturity in August 2055.
- The notes are secured by substantially all assets of the issuer and its securitization entities, including U.S. Taco Bell franchise agreements, royalties and intellectual property.
- The notes are not guaranteed by YUM! Brands, Inc., Taco Bell of America, LLC, Taco Bell Corp., or any other Company subsidiary.
- The Second Amended and Restated Base Indenture and Management Agreement amended leverage conditions for additional notes, Manager Termination Event thresholds, and the Back-Up Manager expense cap, with some changes effective only after older Class A-2 notes are retired.
- Remaining net proceeds will be distributed to Taco Bell Corp. for transaction expenses and general corporate purposes, including purchases of franchised restaurants.
03—Questions
Frequently Asked Questions
How much debt did Taco Bell Funding issue in this refinancing?
The issuer sold $1,000 million of Series 2025-1 Class A-2-I Notes at a 4.821% fixed rate and $500 million of Series 2025-1 Class A-2-II Notes at a 5.049% fixed rate, totaling $1.5 billion, on September 24, 2025.
What was the old debt that was repaid?
The issuer used net proceeds to repay in full its Series 2016-1 Class A-2-III Notes, of which $938 million was outstanding.
Is YUM! Brands liable for these notes?
No. The filing states the notes and the issuer's related obligations are not guaranteed by the remaining U.S. Taco Bell assets, YUM! Brands, Inc., or any other Company subsidiary. The notes are secured by the Taco Bell securitized assets.
When are the notes due?
The anticipated repayment dates are August 2030 for the Class A-2-I Notes and August 2032 for the Class A-2-II Notes. The legal final maturity is August 2055. If not repaid by the anticipated repayment dates, additional interest accrues at a rate with a minimum of 5.0% per annum, plus specified spreads.
What changed in the governing documents?
The Second Amended and Restated Base Indenture and Second Amended and Restated Management Agreement amended provisions covering additional note issuance conditions, the Back-Up Manager's expense cap, Manager Termination Event thresholds, the Specified Non-Securitization Debt limits, and the Disentanglement Period. Some amendments took effect on the closing date, while others take effect once the Series 2016-1, 2018-1 and 2021-1 Class A-2 notes are no longer outstanding.
04—Continue