What is the purpose of this $500 million credit facility?

The $500 million credit facility is intended for general corporate purposes, including working capital needs. This provides Mondelez with readily available funds for operational flexibility.

Why does this credit facility have such a short maturity date (July 31, 2015)?

The short maturity suggests this facility may be a short-term financing solution, perhaps to bridge a specific funding gap or as part of a broader, ongoing treasury management strategy. It could also be a precursor to a longer-term financing arrangement or a renewal of existing short-term debt.

What are the main financial covenants associated with this agreement?

The primary financial covenant disclosed is the requirement to maintain a minimum shareholders' equity of not less than $24.6 billion. Importantly, this figure excludes accumulated other comprehensive income/losses, cumulative accounting principle changes, and mark-to-market accounting adjustments for pension and retirement plans.

What types of interest rates will apply to borrowings under this facility?

Borrowings will bear interest at a variable annual rate. The rate will be based on either LIBOR or a base rate, at Mondelez's election, plus an applicable margin. The margin for LIBOR-based borrowings is determined by the company's long-term senior unsecured debt rating.

MDLZ 8-K: Material Agreements & Financial Events

Summary

Mondelez International, Inc. (MDLZ) filed an 8-K report on June 11, 2015, disclosing the establishment of a new senior unsecured revolving credit facility. This facility, with an aggregate principal amount of $500 million, was entered into on June 11, 2015, and matures on July 31, 2015. The agreement was made with JPMorgan Chase Bank, N.A. and HSBC Bank USA, National Association, serving as lenders. The company expects to utilize this revolving credit facility for general corporate purposes, including working capital needs. This short-term financing provides Mondelez with immediate access to liquidity. Key terms include variable interest rates tied to LIBOR or base rate plus an applicable margin, and a covenant requiring the maintenance of a minimum shareholders' equity of $24.6 billion, with specific exclusions for certain accounting adjustments related to other comprehensive income and pension plans. The agreement also includes standard representations, covenants, and events of default, typical for such credit facilities.

Key Highlights

1Mondelez International entered into a $500 million senior unsecured revolving credit facility on June 11, 2015.
2The facility has a short maturity date of July 31, 2015.
3The lenders for this facility are JPMorgan Chase Bank, N.A. and HSBC Bank USA, National Association.
4The funds are intended for general corporate purposes, including working capital.
5Interest rates are variable, based on LIBOR or base rate plus an applicable margin.
6A key covenant requires maintaining a minimum shareholders' equity of $24.6 billion (with specific exclusions).
7The agreement includes customary representations, covenants, and events of default.

Mondelez International, Inc. 8-K Report, Material Agreement (Jun 11, 2015)

Summary

Key Highlights

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