01—Abstract
Summary
Summary of the 8-K filed December 19, 2025. Cited figures are marked; the original filing is the authoritative source.
On December 18, 2025, Keurig Dr Pepper Inc. (KDP) entered into a 364-day Term Loan Agreement with the lenders party thereto and Morgan Stanley Senior Funding, Inc. as administrative agent, under which lenders committed, subject to certain conditions, to provide financing in an aggregate amount not to exceed €10.35 billion.
Borrowings bear interest at EURIBOR plus a margin of 0.750%a to 1.750%, depending on the rating of certain index debt, and undrawn commitments carry a commitment fee of 0.060% to 0.200% per annum beginning December 23, 2025. The proceeds may be used to fund the contemplated acquisition of JDE Peet's, although the company may instead use proceeds from one or more other debt or financings. The agreement includes a minimum interest coverage ratio of 3.25 to 1.00 that applies after the initial funding date, and a maximum total net leverage ratio of 6.25 to 1.00 that applies after the initial funding date only upon a downgrade in the ratings of certain index debt.
Commitments will be mandatorily reduced or loans prepaid with net cash proceeds from non-ordinary course asset sales and certain debt and equity issuances, subject to specified exceptions. Obligations are guaranteed by subsidiaries that guarantee the company's revolving credit facility and senior notes.
Concurrently, KDP entered into Amendment No. 1 to its Bridge Credit Agreement dated August 24, 2025, which reduced the 364-day senior unsecured bridge loan commitments by €10.35 billion, from €16.2 billion to €5.85 billion. The amendment also modifies commitment reduction and mandatory prepayment provisions so that certain debt proceeds first reduce amounts under the Term Loan Agreement and then the Bridge Credit Agreement.
02—Key points
Key Highlights
- Entered a 364-day Term Loan Agreement with commitments up to €10.35 billion, administered by Morgan Stanley Senior Funding, Inc.
- Term loan borrowings priced at EURIBOR plus 0.750% to 1.750%, based on the rating of certain index debt; undrawn commitment fee of 0.060% to 0.200% per annum starting December 23, 2025.
- Proceeds may fund the contemplated acquisition of JDE Peet's, though the company may use other debt or financing proceeds instead.
- Financial covenants include a minimum interest coverage ratio of 3.25 to 1.00 after the initial funding date and a maximum total net leverage ratio of 6.25 to 1.00 that applies only upon a downgrade of certain index debt.
- Amendment No. 1 reduced the Bridge Credit Agreement commitments by €10.35 billion, from €16.2 billion to €5.85 billion, with certain debt proceeds applied first to the Term Loan Agreement.
- Term loan commitments must be reduced or loans prepaid with net cash proceeds from non-ordinary course asset sales and certain debt and equity issuances, subject to exceptions.
- Term loan obligations are guaranteed by the subsidiaries that guarantee the company's revolving credit facility and outstanding senior notes.
03—Questions
Frequently Asked Questions
How large is the new term loan facility and what is it for?
The Term Loan Agreement provides a 364-day facility with aggregate commitments not to exceed €10.35 billion, subject to conditions. Proceeds may be used to fund the contemplated acquisition of JDE Peet's, although KDP may instead use proceeds from one or more other debt or financings.
What will the term loan cost KDP?
Borrowings bear interest at EURIBOR plus a margin of 0.750% to 1.750%, depending on the rating of certain index debt. Undrawn commitments are subject to a commitment fee of 0.060% to 0.200% per annum, commencing December 23, 2025, at a rate that also depends on that index debt rating.
What financial covenants apply to the term loan?
The agreement requires a minimum interest coverage ratio of 3.25 to 1.00 after the initial funding date. A maximum total net leverage ratio of 6.25 to 1.00 applies after the initial funding date only if the ratings of certain index debt are downgraded.
How does the amendment to the Bridge Credit Agreement change KDP's financing?
Amendment No. 1 reduces lender commitments under the 364-day senior unsecured bridge loan facility by €10.35 billion, from €16.2 billion to €5.85 billion. It also provides that certain debt proceeds will first reduce amounts under the Term Loan Agreement and then the Bridge Credit Agreement.
04—Continue