Summary
Philip Morris International Inc. (PMI) filed an 8-K on March 29, 2010, to report on two significant financial events. First, the company entered into a new US$2.5 billion senior unsecured revolving credit facility set to mature in September 2013. This facility replaces two existing credit lines and will be used for general corporate purposes, including backing its commercial paper program. A key condition for this new facility is maintaining an EBITDA to interest ratio of at least 3.5 to 1.0. Secondly, PMI announced the issuance of US$1 billion in 4.50% Notes due 2020. These notes are senior unsecured obligations and rank equally with other unsecured debt. The issuance was made under an indenture dated April 25, 2008, with a specific Terms Agreement executed on March 23, 2010, detailing the sale to underwriters. These announcements indicate proactive management of PMI's liquidity and capital structure.
Key Highlights
- 1PMI established a new US$2.5 billion senior unsecured revolving credit facility, maturing September 30, 2013.
- 2The new credit facility replaces two prior credit agreements that were set to expire in 2010.
- 3The revolving credit facility is available for general corporate purposes, including commercial paper backstop.
- 4A financial covenant requires PMI to maintain an EBITDA to interest ratio of at least 3.5 to 1.0.
- 5PMI issued US$1 billion of 4.50% Notes due 2020.
- 6The newly issued notes are senior unsecured obligations, ranking equally with existing and future senior unsecured indebtedness.
- 7The company has filed a prospectus supplement dated March 23, 2010, related to the note offering.