8-KFinancial Events

COCA COLA CO 8-K Report, Financial Obligation (Sep 1, 2011)

Filed September 1, 2011For Securities:KO

Summary

The Coca-Cola Company (KO) filed an 8-K on September 1, 2011, to report on the issuance of new senior notes. This filing primarily details the exchange of existing debt from its subsidiary, Coca-Cola Refreshments USA, Inc. (CCR), for new notes issued by the parent company. Specifically, KO issued $3.129 billion in 1.80% Senior Notes due 2016 and $1.422 billion in 3.30% Senior Notes due 2021. These new notes are part of a broader debt refinancing effort and are fungible with previously issued notes of the same maturity dates. They are unsecured and unsubordinated obligations of Coca-Cola. The issuance is significant for investors as it reflects the company's ongoing management of its capital structure and its commitment to its subsidiary's debt. The registration rights agreement ensures that these notes will eventually be registered or exchanged for registered notes, providing greater transparency and liquidity for investors.

Key Highlights

  • 1The Coca-Cola Company (KO) issued $3.129 billion in 1.80% Senior Notes due 2016 and $1.422 billion in 3.30% Senior Notes due 2021.
  • 2These notes were issued in exchange for specified outstanding debt securities of its wholly-owned subsidiary, Coca-Cola Refreshments USA, Inc. (CCR).
  • 3The issuance is part of an exchange offer that has now expired.
  • 4The new notes are fungible with previously issued notes of the same maturity, forming single series.
  • 5The notes are general unsecured obligations of KO, ranking equally with existing and future unsecured and unsubordinated debt.
  • 6Interest payments are semi-annual (March 1 and September 1), beginning March 1, 2012.
  • 7KO has entered into a Registration Rights Agreement to register these notes or exchange them for registered notes under the Securities Act, with potential penalties for non-compliance.

Frequently Asked Questions

The primary purpose of this filing is to report the issuance of new senior notes by The Coca-Cola Company (KO) in exchange for outstanding debt from its subsidiary, Coca-Cola Refreshments USA, Inc. (CCR), as part of an expired exchange offer.

The company issued $3.129 billion in 1.80% Senior Notes due 2016 and $1.422 billion in 3.30% Senior Notes due 2021. These are general unsecured obligations with semi-annual interest payments.

The notes were initially issued to qualified institutional buyers and non-U.S. persons under specific exemptions (Rule 144A and Regulation S). The company is obligated under a Registration Rights Agreement to file a registration statement to allow for their exchange into registered notes or for resale.

As unsecured obligations, these notes rank equally with other unsecured and unsubordinated debt of The Coca-Cola Company. In the event of bankruptcy or liquidation, holders of these notes would have a general claim on the company's assets, subordinate to secured creditors.