Summary
Philip Morris International Inc. (PMI) filed an 8-K on May 17, 2011, reporting two significant financial events that occurred on May 10-11, 2011. Firstly, PMI entered into an amended and restated credit agreement for a senior unsecured revolving credit facility totaling US$2.5 billion, set to expire on March 31, 2015. This facility is intended for general corporate purposes, including a commercial paper backstop, and requires PMI to maintain a minimum EBITDA to interest coverage ratio of 3.5 to 1.0. Secondly, the company announced the successful issuance of US$1 billion in aggregate principal amount of new notes: US$650 million of 2.500% Notes due 2016 and US$350 million of 4.125% Notes due 2021. These notes are senior unsecured obligations and rank equally with existing senior unsecured indebtedness.
Key Highlights
- 1PMI secured a US$2.5 billion revolving credit facility maturing on March 31, 2015, for general corporate purposes.
- 2The new credit facility includes a financial covenant requiring a minimum EBITDA to interest coverage ratio of 3.5 to 1.0.
- 3PMI issued US$650 million in 2.500% senior unsecured notes due 2016.
- 4PMI also issued US$350 million in 4.125% senior unsecured notes due 2021.
- 5The Notes are subject to customary covenants, including limitations on liens and sale/leaseback transactions.
- 6The credit agreement amends and restates a previous US$2.5 billion facility that was set to expire in September 2013.
- 7No borrowings were outstanding under the previous credit facility as of May 11, 2011.