8-KMaterial AgreementsFinancial EventsExhibits & Filings

Mondelez International, Inc. 8-K Report, Material Agreement (May 31, 2007)

Filed May 31, 2007For Securities:MDLZ

Summary

This Form 8-K filing by Kraft Foods Inc. (predecessor to Mondelez International, Inc.) on May 31, 2007, primarily concerns the establishment of a new $1.5 billion senior unsecured 364-day revolving credit agreement. This facility, effective May 24, 2007, and expiring May 22, 2008, provides Kraft and certain subsidiaries with significant borrowing capacity for general corporate purposes and to back its commercial paper issuances. Investors should note that this credit line is in addition to an existing $4.5 billion credit agreement, indicating a proactive approach to maintaining robust liquidity. The company's ability to draw upon these facilities suggests a commitment to operational flexibility and financial stability. The disclosure of various financial services provided by lenders and their affiliates to Kraft also highlights the complex, inter-related nature of its banking relationships.

Key Highlights

  • 1Kraft Foods Inc. entered into a new $1.5 billion senior unsecured 364-day revolving credit agreement on May 24, 2007.
  • 2The credit facility has an expiration date of May 22, 2008.
  • 3The agreement allows Kraft and designated subsidiaries to borrow, prepay, and re-borrow funds within the stated aggregate principal amount.
  • 4Proceeds from certain debt or equity offerings with maturities greater than one year will reduce the lenders' commitments.
  • 5The new credit line will be used for general corporate purposes and to support commercial paper issuances.
  • 6This 364-day facility supplements an existing $4.5 billion 5-year revolving credit agreement dated April 15, 2005.
  • 7The filing indicates that some lenders and their affiliates provide various financial services to Kraft, including investment banking and cash management.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the creation of a new $1.5 billion senior unsecured 364-day revolving credit agreement, detailing its terms, expiration, and intended uses.

Following this agreement, Kraft Foods has a new $1.5 billion 364-day revolving credit facility, in addition to its existing $4.5 billion 5-year revolving credit agreement. The total reported revolving credit capacity through these two facilities is $6.0 billion.

A 364-day term is a short-term credit facility, often used for working capital needs, seasonal fluctuations, or as a bridge financing tool. For Kraft, it likely provides flexible, short-term borrowing capacity to support immediate operational needs or manage its commercial paper program.

The lenders' commitments under the new agreement can be reduced by the net cash proceeds received by Kraft from certain debt or equity offerings that have a maturity of greater than one year. This suggests a strategy to use longer-term financing to potentially pay down or reduce reliance on shorter-term credit facilities.