Summary
This 8-K filing from Kraft Foods Inc. (the predecessor to Mondelez International) on December 1, 2009, primarily reports on the execution of a new $4.5 billion senior unsecured revolving credit agreement. This new facility replaces an existing five-year agreement and has a three-year term maturing on November 30, 2012. It provides the company with significant liquidity for general corporate purposes, including working capital and support for commercial paper issuances. Of particular note for investors is the inclusion of a covenant requiring minimum total shareholders' equity of $23 billion. This covenant is subject to an increase if the proposed acquisition of Cadbury plc is consummated, specifically by 75% of any equity issuances related to financing that acquisition or refinancing associated debt. This highlights the strategic importance of the Cadbury acquisition to Kraft Foods' financial structure and future obligations. The filing also mentions the potential for increasing the credit facility by up to $500 million, offering further financial flexibility.
Key Highlights
- 1Kraft Foods Inc. (now Mondelez International) entered into a new $4.5 billion senior unsecured revolving credit agreement on November 30, 2009.
- 2The new credit facility has a three-year term, maturing on November 30, 2012.
- 3This agreement replaces a prior $4.5 billion five-year revolving credit agreement which was terminated.
- 4The revolving credit facility can be used for general corporate purposes, including working capital and supporting commercial paper issuances.
- 5A key covenant requires minimum total shareholders' equity of $23 billion, with adjustments tied to the proposed Cadbury plc acquisition.
- 6The facility includes an option to increase the aggregate commitment by up to $500 million, subject to lender agreement.
- 7The filing also contains forward-looking statements related to the proposed acquisition of Cadbury plc.