What is the primary purpose of this 8-K filing?

This Form 8-K reports on the issuance of $800 million in Floating Rate Notes due 2013 by Kraft Foods Inc. (the predecessor entity to Mondelez International in this context) and provides details about the terms of these notes, including covenants and redemption triggers.

How will the announced spin-off of the North American grocery business affect these notes?

Upon the public announcement of the record date for the previously announced spin-off of its North American grocery business, Kraft Foods Inc. is required to issue a notice of redemption for all of these Floating Rate Notes. The redemption price will be 100% of the aggregate principal amount plus accrued and unpaid interest.

What are the key terms and maturity date of these notes?

The notes have an aggregate principal amount of $800 million and mature on July 10, 2013. They are floating rate notes, meaning the interest rate will adjust quarterly based on LIBOR plus 87.5 basis points. Interest is paid quarterly, beginning April 10, 2012.

What protective provisions are in place for investors holding these notes?

The notes have several protective provisions. Mandatory redemption is triggered by the announced spin-off. Additionally, if a 'change of control' event occurs and the Notes are downgraded below investment grade by Moody's, S&P, and Fitch within a specified timeframe, the company must make an offer to purchase the notes at 101% of their principal amount plus accrued interest. The notes can also be redeemed under specific tax event scenarios.

MDLZ 8-K SEC Disclosure

Summary

This 8-K filing from Kraft Foods Inc. (the predecessor to Mondelez International, Inc. for this filing's context) reports on the issuance of $800 million in Floating Rate Notes due July 10, 2013. The notes carry a floating interest rate tied to LIBOR plus 87.5 basis points, with interest payable quarterly. This issuance occurred amidst preparations for a significant corporate restructuring, specifically the spin-off of Kraft's North American grocery business. The filing also details certain covenants and conditions related to the notes, including provisions for redemption triggered by the announced spin-off and potential change-of-control events. Investors should note that the terms of these notes include specific clauses that could lead to their early redemption or repurchase. Notably, the spin-off announcement will trigger a mandatory redemption of all notes. Furthermore, a combination of a change of control and a credit rating downgrade by major agencies will necessitate an offer to purchase the notes at a premium. These provisions highlight the company's efforts to manage its debt obligations in light of strategic corporate changes, providing some protection to noteholders under specific adverse scenarios.

Key Highlights

1Kraft Foods Inc. issued $800 million in Floating Rate Notes due July 10, 2013.
2The Notes bear interest at LIBOR plus 87.5 basis points, resetting quarterly.
3Interest is payable quarterly, commencing April 10, 2012.
4The issuance is linked to the planned spin-off of Kraft's North American grocery business.
5The spin-off announcement will trigger a mandatory redemption of all Notes.
6A change of control coupled with a credit rating downgrade below investment grade will trigger an offer to purchase the Notes.
7The Notes are senior unsecured obligations ranking equally with existing and future senior unsecured indebtedness.

Mondelez International, Inc. 8-K Report, Corporate Update (Jan 10, 2012)

Summary

Key Highlights

Frequently Asked Questions