8-KOther EventsExhibits & Filings

PEPSICO INC 8-K Report, Corporate Update (May 28, 2021)

Filed May 28, 2021For Securities:PEP

Summary

PepsiCo, Inc. (PEP) filed an 8-K on May 28, 2021, to announce the termination and replacement of its credit facilities. The company terminated its $3.75 billion 364-day unsecured revolving credit agreement dated June 1, 2020, and simultaneously entered into a new $3.75 billion 364-day unsecured revolving credit agreement, expiring on May 27, 2022. This new facility allows for borrowings in USD and Euros and includes an option to increase commitments up to $4.5 billion, with provisions for renewal or conversion into a term loan. In addition to the short-term facility, PepsiCo also terminated its $3.75 billion five-year unsecured revolving credit agreement dated June 3, 2019, and entered into a new $3.75 billion five-year unsecured revolving credit agreement, expiring on May 28, 2026. This longer-term facility also permits borrowings in USD and Euros, includes a $750 million swing line subfacility for Euro borrowings, and offers the potential to increase commitments to $4.5 billion. Both new credit agreements are for general corporate purposes and contain standard terms and conditions.

Key Highlights

  • 1PepsiCo has replaced its existing 364-day and five-year unsecured revolving credit agreements with new, equivalent facilities.
  • 2The new 364-day credit agreement has a facility size of $3.75 billion and expires on May 27, 2022.
  • 3The new five-year credit agreement has a facility size of $3.75 billion and expires on May 28, 2026.
  • 4Both new credit agreements allow for borrowings in U.S. Dollars and Euros.
  • 5There is an option to increase the size of both credit facilities up to $4.5 billion with lender consent.
  • 6Funds borrowed under these agreements are for general corporate purposes.
  • 7No outstanding borrowings were reported on the terminated credit agreements.

Frequently Asked Questions

The new credit agreements are primarily for general corporate purposes of PepsiCo and its subsidiaries. This means the funds can be used for various operational needs, investments, or other business activities.

No, the filing explicitly states that there were no outstanding borrowings under either the 2020 364-day unsecured revolving credit agreement or the 2019 five-year unsecured revolving credit agreement at the time of their termination.

The primary difference is the term. The 364-day agreement is short-term, expiring in May 2022, while the five-year agreement is longer-term, expiring in May 2026. Both have the same initial principal amount and offer similar flexibility for borrowings and potential increases.

No, the termination and replacement of credit facilities, especially with no outstanding borrowings, typically indicates proactive treasury management and is not indicative of financial distress. It suggests PepsiCo is maintaining flexible access to capital on terms it deems favorable.