Banks Start Bond Sale for Roark's Subway Sandwich Chain LBO.

Subway, the sandwich chain, is selling $3.35 billion of asset-backed securities to finance its buyout, making it the largest securitization of its kind on record. The company is using a whole business securitization, where it pledges most of its assets as collateral, including franchise fees. This type of securitization has been popular among businesses with large networks of franchised stores, as it allows for cheaper financing terms in exchange for more control of the assets. Last year, private equity company Roark acquired Subway for over $9 billion, with $5 billion of financing from major banks. ABS sales have been higher this year, with traditional collateral like auto loans and unusual collateral like data centers driving issuance to a record start. [Extracted from the article]