Summary
On March 8, 2012, Kraft Foods Inc. (the registrant, which would later become Mondelez International) entered into a $4.0 billion 364-day senior unsecured revolving credit facility with Kraft Foods Global, Inc., a wholly owned subsidiary. This facility is intended to provide liquidity for general corporate purposes for both the parent company and its subsidiaries. Notably, the company's guarantee of this credit facility will automatically terminate upon the previously announced spin-off of its North American grocery business, releasing Kraft Foods Inc. from its obligations under this agreement. The terms of the credit facility are structured to adapt post-spin-off, with interest rates based on LIBOR or base rate plus an applicable margin. The margin will depend on the credit ratings of either Kraft Foods Inc. (pre-spin-off) or Kraft Foods Global (post-spin-off). The agreement incorporates existing covenants from a prior credit facility pre-spin-off and will subject Kraft Foods Global to customary covenants, including restrictions on liens and asset sales, post-spin-off.
Key Highlights
- 1Kraft Foods Inc. secured a $4.0 billion 364-day revolving credit facility on March 8, 2012.
- 2The credit facility is for Kraft Foods Global, Inc., a wholly owned subsidiary, with Kraft Foods Inc. acting as guarantor.
- 3Proceeds are designated for general corporate purposes for both Kraft Foods Global and its subsidiaries, and for Kraft Foods Inc. and its subsidiaries pre-spin-off.
- 4The company's guarantee and obligations under the credit agreement will terminate automatically upon the completion of the announced North American grocery business spin-off.
- 5Interest rates are variable, tied to LIBOR or base rate, plus an applicable margin determined by senior unsecured debt ratings.
- 6The credit agreement incorporates covenants from a previous agreement pre-spin-off and will impose standard covenants on Kraft Foods Global post-spin-off.