Summary
Mondelez International, Inc. (MDLZ) filed an 8-K on September 23, 2020, detailing a significant debt restructuring. The company's Dutch subsidiary, MIHNBV, issued new notes totaling €1.25 billion (€500 million of 0.000% Notes due 2026 and €750 million of 0.375% Notes due 2029). These new notes were issued in a private placement exempt from registration. Concurrently, MIHNBV fully prepaid and terminated its existing $1.5 billion Term Loan Agreement from 2016, utilizing proceeds from the new note issuance.
Key Highlights
- 1Issuance of €1.25 billion in new debt: €500 million (0.000% Notes due 2026) and €750 million (0.375% Notes due 2029).
- 2Termination of a $1.5 billion Term Loan Agreement due to full prepayment.
- 3The new notes are guaranteed by Mondelez International, Inc. on a senior unsecured basis.
- 4The new debt issuance was conducted as a private placement, exempt from SEC registration requirements.
- 5Interest on the new notes is payable annually in arrears.
- 6The indenture includes customary covenants limiting the incurrence of secured debt, sale and leaseback transactions, and asset dispositions.
- 7A change of control event coupled with a rating downgrade could trigger an offer to repurchase the notes at 101% of principal plus accrued interest.
Frequently Asked Questions
The primary event is the issuance of €1.25 billion in new debt by Mondelez's subsidiary, MIHNBV, and the subsequent termination of a $1.5 billion term loan facility. This represents a refinancing and a move towards potentially lower interest expenses.
The Term Loan Agreement was terminated because MIHNBV fully prepaid the outstanding $750 million principal amount. This prepayment was financed by the proceeds from the issuance of the new €1.25 billion notes.
Mondelez's subsidiary issued €500 million of 0.000% Notes due 2026 and €750 million of 0.375% Notes due 2029. These notes are guaranteed by the parent company on a senior unsecured basis and bear annual interest payable in arrears. The issuance was exempt from registration requirements.
Yes, if the company experiences both a change of control event and a downgrade of the notes' rating below investment grade by both Moody's and S&P within a specified period, MIHNBV will be required to offer to repurchase the notes at 101% of their principal amount, plus accrued interest.