8-KMaterial AgreementsFinancial EventsExhibits & Filings

ALTRIA GROUP, INC. 8-K Report, Material Agreement (Nov 17, 2010)

Filed November 17, 2010For Securities:MO

Summary

Altria Group, Inc. (MO) filed an 8-K report on November 17, 2010, to disclose the entry into a new $600 million senior unsecured 364-day revolving credit agreement. This new agreement replaces a previous similar facility set to expire shortly and is intended for general corporate purposes and to support commercial paper issuances. Key terms of the new credit agreement include interest rates tied to prevailing market rates and Altria's credit default swap spread, with provisions for adjustments based on debt ratings. The agreement is guaranteed by Altria's subsidiary, Philip Morris USA Inc. (PM USA), and includes financial covenants related to debt-to-EBITDA and EBITDA-to-interest expense ratios. Importantly, Altria had no outstanding borrowings under this new facility as of the filing date.

Key Highlights

  • 1Altria entered into a new $600 million, 364-day senior unsecured revolving credit agreement.
  • 2The new credit facility replaces a prior agreement that was set to expire on November 19, 2010.
  • 3The credit agreement is intended for general corporate purposes and to support commercial paper issuances.
  • 4Borrowing costs will be based on prevailing interest rates and Altria's credit default swap spread.
  • 5Philip Morris USA Inc. (PM USA) provided a guarantee for Altria's obligations under the credit agreement.
  • 6The agreement includes financial covenants requiring a debt-to-EBITDA ratio not exceeding 3.0:1 and an EBITDA-to-interest expense ratio of at least 4.0:1.
  • 7Altria reported no borrowings outstanding under the new credit agreement as of the filing date.

Frequently Asked Questions

This 8-K filing announces Altria Group, Inc.'s entry into a new $600 million senior unsecured 364-day revolving credit agreement, replacing an existing similar facility and serving for general corporate purposes and commercial paper support.

Altria must maintain a ratio of debt to consolidated EBITDA not exceeding 3.0 to 1, and a ratio of consolidated EBITDA to consolidated interest expense of at least 4.0 to 1, calculated on a rolling four-quarters basis.

Altria's wholly-owned subsidiary, Philip Morris USA Inc. (PM USA), has provided a guarantee for Altria's obligations under the new credit agreement.

No, as of November 17, 2010, Altria had no borrowings outstanding under the new $600 million credit agreement.