Summary
This Form 8-K filing by Kraft Foods Inc. (the predecessor to Mondelez International) on March 24, 2008, announces a significant financing transaction. The company entered into a Subscription Agreement to issue and sell €2.85 billion in aggregate principal amount of notes, specifically €2.0 billion of 5.75% notes due 2012 and €850 million of 6.25% notes due 2015. This move is designed to raise capital, likely for general corporate purposes or strategic initiatives, impacting the company's debt structure and financial leverage. Investors should note that these notes are senior, unsecured obligations, ranking pari passu with other unsecured debt, subject to a negative pledge covenant. Key provisions include a change of control clause that, if coupled with a credit rating downgrade, triggers a mandatory purchase offer at 101% of par. The notes are listed on the Irish Stock Exchange and offered outside the U.S. under Regulation S, indicating a focus on international capital markets for this issuance.
Key Highlights
- 1Kraft Foods Inc. issued €2.85 billion in new debt through two tranches: €2.0 billion of 5.75% notes due 2012 and €850 million of 6.25% notes due 2015.
- 2The issuance was executed via a Subscription Agreement with a syndicate of Joint Lead Managers and Co-Managers, including major financial institutions.
- 3The notes are senior, unsubordinated, and unsecured obligations of Kraft Foods Inc.
- 4A change of control event, combined with a downgrade below investment grade by major rating agencies, triggers a mandatory offer to repurchase the notes at 101% of their principal amount.
- 5The notes are listed on the Irish Stock Exchange and admitted to trading on its European Economic Area Regulated Market.
- 6The offering was conducted outside the U.S. under Regulation S, meaning they are not registered under the Securities Act of 1933 and have restrictions on sale to U.S. persons.
- 7The company may redeem the notes upon specified tax events.