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Yum Brands CEO: Why our buyback makes sense

CEO Greg Creed on Friday defended Yum Brands' latest buyback program despite concerns surrounding it, including a cut in the company's bond ratings.

"We're going to become a global franchise with a huge cash flow. We did a lot of analysis, obviously, and we believe we can leverage up the balance sheet to about five times EBITDA," Creed told CNBC's "Squawk Box."

Creed made his remarks a day after the parent company of fast food chains including KFC and Pizza Hut announced a $6.2 billion buyback program, which is expected to be completed by the end of next year.

The announcement led Standard & Poor's to cut its bonds rating to "BB" from "BBB."

"The downgrade primarily reflects our expectation of the company's meaningfully higher leverage as it executes on its newly communicated financial policy with a leverage ratio of about five times, which results in our assessment of its financial risk profile as 'highly leveraged,'" the ratings agency said Thursday.

Yum also said Thursday its China same-store sales fell 3 percent last month.

Still, Creed said he feels good about "the financial position of the company today, and we feel even better about the company moving forward."