Subway Borrows $3.35 Billion in Biggest Securitization of Its Kind
- Debut deal is largest whole business securitization on record
- Investors placed orders amounting to more than $19 billion
A Subway sandwich shop in San Francisco.
Photographer: David Paul Morris/BloombergSubway, the restaurant chain with the most locations in the US, has sold $3.35 billion of asset-backed bonds to help fund its buyout by Roark Capital Group, in what is the largest securitization of its kind on record.
The sandwich maker priced the largest portion of its whole business securitization — where a company pledges most of its assets as collateral, including franchise fees — at spreads of 150 basis points above the benchmark, according to people with knowledge of the deal. The jumbo transaction is the largest among other multi-billion dollar franchise-backed deals from well-known chains like Dunkin’ Brands Group Inc., Taco Bell and Wendy’s. Dunkin’ was the holder of the previous record WBS deal, at around $2.5 billion in 2015.