What is the purpose of these new credit agreements?

The new credit agreements, a $1.5 billion 364-day facility and a $4.5 billion five-year facility, are intended for Mondelez International's general corporate purposes. This includes supporting working capital needs and the company's commercial paper program, ensuring continued financial flexibility.

How do these new credit facilities compare to the previous ones?

These new facilities replace previously existing credit agreements of the same sizes and terms. The $1.5 billion 364-day facility replaces a similar one that expired, and the $4.5 billion five-year facility replaces a similar one that was set to mature later. This represents a refinancing of existing credit lines.

What are the key financial covenants associated with these agreements?

A significant covenant in both the 364-day and five-year revolving credit agreements is the requirement for Mondelez International to maintain a minimum shareholders' equity of not less than $25.0 billion. Certain accounting adjustments, such as accumulated other comprehensive income/loss and mark-to-market adjustments for pension plans, are excluded from this calculation.

What are the borrowing costs for these new facilities?

Borrowings under both new credit agreements will bear interest at a variable annual rate. The rate will be based on either the SOFR (Secured Overnight Financing Rate) or a base rate, at Mondelez's election, plus an applicable margin. This margin is determined by the company's long-term senior unsecured debt rating, meaning better credit ratings could result in lower borrowing costs.

MDLZ 8-K: Material Agreements & Financial Events

01—Abstract

Summary

Summary of the 8-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.

Mondelez International, Inc. (MDLZ) has filed an 8-K report detailing the refinancing of its revolving credit facilities.

The company has entered into a new $1.5 billion^a 364-day revolving credit agreement and a new $4.5 billion five-year revolving credit agreement. These new facilities replace previously existing credit agreements of the same terms and sizes. The primary purpose for these credit lines is for general corporate purposes, including working capital and supporting the company's commercial paper program.

This refinancing demonstrates an active approach to managing its liquidity and financing structure. The agreements include provisions for potential increases in credit availability, extension options for the five-year facility, and variable interest rates tied to SOFR or base rates plus an applicable margin based on senior unsecured debt ratings.

A key covenant across both agreements is the maintenance of a minimum shareholders' equity of $25.0 billion^b, with specific exclusions for certain accounting adjustments. This move indicates a proactive strategy to ensure robust financial flexibility for the company's ongoing operations and strategic initiatives.

02—Key points

Key Highlights

Entered into a new $1.5 billion 364-day senior unsecured revolving credit facility, maturing February 18, 2026.
Entered into a new $4.5 billion five-year senior unsecured revolving credit facility, maturing February 19, 2030, replacing a previous agreement.
Both new credit facilities are intended for general corporate purposes, including working capital and supporting commercial paper programs.
The new agreements allow for potential increases in credit availability, up to $500 million for the 364-day facility and $1 billion for the five-year facility, subject to lender agreement.
Both facilities include covenants requiring a minimum shareholders' equity of $25.0 billion, with specific exclusions for certain accounting items.
Interest rates on borrowings are variable, based on SOFR or base rate plus an applicable margin determined by the company's long-term senior unsecured debt rating.
The company terminated its previous $1.5 billion 364-day and $4.5 billion five-year revolving credit agreements in connection with entering into the new facilities.

03—Questions

Frequently Asked Questions

What is the purpose of these new credit agreements?
The new credit agreements, a $1.5 billion 364-day facility and a $4.5 billion five-year facility, are intended for Mondelez International's general corporate purposes. This includes supporting working capital needs and the company's commercial paper program, ensuring continued financial flexibility.
How do these new credit facilities compare to the previous ones?
These new facilities replace previously existing credit agreements of the same sizes and terms. The $1.5 billion 364-day facility replaces a similar one that expired, and the $4.5 billion five-year facility replaces a similar one that was set to mature later. This represents a refinancing of existing credit lines.
What are the key financial covenants associated with these agreements?
A significant covenant in both the 364-day and five-year revolving credit agreements is the requirement for Mondelez International to maintain a minimum shareholders' equity of not less than $25.0 billion. Certain accounting adjustments, such as accumulated other comprehensive income/loss and mark-to-market adjustments for pension plans, are excluded from this calculation.
What are the borrowing costs for these new facilities?
Borrowings under both new credit agreements will bear interest at a variable annual rate. The rate will be based on either the SOFR (Secured Overnight Financing Rate) or a base rate, at Mondelez's election, plus an applicable margin. This margin is determined by the company's long-term senior unsecured debt rating, meaning better credit ratings could result in lower borrowing costs.

04—Continue

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