Arcos Readies Local Currency Takeouts

Arcos Dorados, which controls the LatAm business of McDonald’s, is close to launching takeouts for $350m in debt it took out to acquire the units from the US parent company last year. Arcos got a $350m bridge from Santander and put in $350m of equity along with a handful of other investors, including DLJ South American Partners and Gavea Investimentos. The bridge will be taken out in local currency bank debt in Mexico, Brazil and Puerto Rico, where McDonald’s has a strong presence, says a banker close to the process. Like McDonald’s, Santander is also present in those three markets, and will not only lead syndication of the local debt, but likely take a major role in holding the debt once it is refinanced. Tenors for the MXP, BRL and dollar-denominated debt could be in the 5-year final, 3-year average life area, says the banker. Details of the refi have not been finalized. The local loans are likely to be launched in the coming weeks, says the banker.