A $3bn “whole-business securitisation” is being considered as a funding option by private equity firms vying to acquire sandwich chain Subway, according to a report by Bloomberg, citing unnamed sources with knowledge of the matter.
As well as the asset-backed financing, which would see Subway effectively mortgage all of its assets, including royalties, fees and intellectual property, the firms would look to raise an additional $2bn from traditional bonds and loans, according to Bloomberg’s sources.
Subway is being advised by JPMorgan Chase & Co on the potential deal, with the bank reportedly offering interested buyers a $5bn, one-year bridge financing package.
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According to the sources, discussions are still preliminary and there is no guarantee that a deal will be completed.
About half-a-dozen parties are thought to be interested in acquiring Subway as part of an auction that should conclude early next month and value the business at more than $9bn.
Source: Private Equity Wire
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