Summary
Mondelez International, Inc. (MDLZ) filed an 8-K on March 1, 2018, to report the execution of a new $1.5 billion revolving credit agreement. This 364-day facility, entered into on February 28, 2018, provides the company with significant liquidity for general corporate purposes, including working capital and support for its commercial paper program. The agreement is unsecured and has a variable interest rate tied to LIBOR or a base rate plus an applicable margin determined by Mondelez's debt rating. The facility includes a key covenant requiring Mondelez to maintain a minimum shareholders' equity of not less than $24.6 billion, with specific exclusions for certain accounting adjustments. The agreement also offers the potential for an extension of the maturity date by one year, subject to certain conditions. This action suggests a proactive approach by management to ensure robust financial flexibility and operational support.
Key Highlights
- 1Mondelez entered into a new 364-day senior unsecured revolving credit agreement for $1.5 billion.
- 2The agreement was finalized on February 28, 2018, with a termination date of February 27, 2019.
- 3The credit facility is intended for general corporate purposes, including working capital and supporting the commercial paper program.
- 4Borrowings under the agreement will bear variable interest rates based on LIBOR or a base rate plus an applicable margin tied to debt ratings.
- 5A key financial covenant requires a minimum shareholders' equity of $24.6 billion, with specific exclusions.
- 6The company has the option to extend the maturity of outstanding loans by one year to February 26, 2020, under certain conditions.
- 7Several major financial institutions, including J.P. Morgan Chase Bank, N.A., and Citigroup Global Markets Inc., are involved as lenders and arrangers.