8-KMaterial AgreementsFinancial Events

Mondelez International, Inc. 8-K Report, Material Agreement (Mar 14, 2012)

Filed March 14, 2012For Securities:MDLZ

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.

Frequently Asked Questions

The primary purpose of this 364-day revolving credit facility is to provide Kraft Foods Global, Inc. (and its subsidiaries) with liquidity for general corporate purposes. Prior to the spin-off, it also serves general corporate purposes for Kraft Foods Inc. and its subsidiaries.

Upon the consummation of the previously announced spin-off of its North American grocery business, Kraft Foods Inc.'s guarantee of this credit facility will automatically terminate, and the company will be released from its obligations under the agreement.

The interest rate will be a variable annual rate based on either the LIBOR or a base rate, at Kraft Foods Global's election. This will be plus an applicable margin. The margin is dependent on the credit ratings of either Kraft Foods Inc.'s long-term senior unsecured indebtedness (prior to the spin-off) or Kraft Foods Global's long-term senior unsecured indebtedness (on or after the spin-off).

Yes, prior to the spin-off, the agreement incorporates covenants from Kraft Foods Inc.'s existing 4-year revolving credit agreement. Following the spin-off, Kraft Foods Global will be subject to customary affirmative and negative covenants, which include restrictions on incurring liens, selling substantially all assets, or merging with other entities. It will also incorporate any financial maintenance covenants from longer-term credit agreements of Kraft Foods Global.