8-KMaterial AgreementsFinancial EventsExhibits & Filings

Mondelez International, Inc. 8-K Report, Material Agreement (Apr 21, 2005)

Filed April 21, 2005For Securities:MDLZ

Summary

Kraft Foods Inc. (MDLZ), on April 15, 2005, entered into a new senior unsecured 5-year revolving credit agreement totaling $4.5 billion. This facility replaces two existing credit agreements, one a 364-day facility set to expire in July 2005 and the other a 5-year facility expiring in July 2006. The new agreement, which expires in April 2010 with an extension option, is intended for general corporate purposes and to support commercial paper issuances. This refinancing demonstrates proactive liquidity management by Kraft Foods. The increased aggregate principal amount and longer maturity provide enhanced financial flexibility and a stronger capital structure. Investors can view this as a positive move, indicating the company's commitment to maintaining robust access to funding for its operations and strategic initiatives.

Key Highlights

  • 1Kraft Foods Inc. entered into a new $4.5 billion 5-year revolving credit agreement.
  • 2The new credit facility replaces two existing agreements with a combined value of $4.5 billion.
  • 3The agreement has an expiration date of April 15, 2010, with an option for extension.
  • 4The primary uses for the new credit facility are general corporate purposes and commercial paper support.
  • 5The agreement requires Kraft Foods to maintain a minimum net worth of $20.0 billion.
  • 6No borrowings were outstanding under the new facility as of April 15, 2005, indicating strong initial liquidity.
  • 7The refinancing provides increased financial flexibility and a more consolidated debt structure.

Frequently Asked Questions

This new $4.5 billion credit agreement replaces older, shorter-term debt facilities, providing Kraft Foods with a more substantial and longer-term source of funding. It enhances the company's financial flexibility for general corporate needs and short-term debt support, signaling a stable liquidity position.

The agreement is a senior unsecured 5-year revolving credit facility totaling $4.5 billion, expiring in April 2010 with an option to extend. Interest rates are based on prevailing market rates. A key covenant requires Kraft Foods to maintain a minimum net worth of $20.0 billion.

Not necessarily. The filing indicates that no borrowings were outstanding under the new facility as of April 15, 2005. The agreement replaces existing credit lines, suggesting a refinancing and consolidation of available credit rather than an immediate increase in total debt. It provides capacity for future needs.

By replacing two separate agreements (a 364-day and a 5-year) with a single 5-year facility, Kraft Foods likely sought to simplify its debt structure, potentially secure more favorable terms, and extend its maturity profile for greater financial stability and planning certainty.