(Bloomberg) -- Banks plan to kick off a bond sale as soon as next week to help pay for Roark Capital Group's buyout of restaurant chain Subway, according to people with knowledge of the matter.
The sandwich maker will raise funds using what's known as a whole business securitization, where a company pledges most of its assets as collateral. The size of the debut deal, led by structuring advisors Morgan Stanley and Barclays Plc, hasn't been determined, the people said, declining to be identified as the details are private.
Representatives for Roark, Morgan Stanley, Barclays and Subway didn't immediately respond to a request for comment.
Whole business securitizations have been a natural fit for businesses with a large network of franchised stores. The company effectively mortgages most of its assets, such as royalties, fees, and intellectual property.
Last year, private equity company Roark beat out other bidders, and agreed to purchase the sandwich shop for more than $9 billion, of which $5 billion of financing came from major banks. The global brand has expanded dramatically to more than 37,000 restaurants compared with 16 shops in 1974.
The whole business securitization sector has seen multi-billion dollar deals from Dunkin' Brands Group Inc., Domino's Pizza Inc. and Taco Bell.
This year, seven other whole business deals — including offerings by chicken finger restaurant chain Zaxby's and bakery Nothing Bundt Cake — have been priced, according to data compiled by Bloomberg News.
--With assistance from Andrew Harrer.
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