Summary
Philip Morris International Inc. (PMI) announced on October 25, 2011, the entry into a new US$3.5 billion senior unsecured revolving credit facility. This facility, provided by various lenders with Citibank International plc as agent, matures on October 25, 2016. It replaces a previous credit agreement set to expire in 2012 and will be used for general corporate purposes. This move signifies PMI's proactive approach to managing its liquidity and financial flexibility. The substantial size of the facility indicates confidence from its banking partners and provides ample resources for ongoing operations, potential strategic initiatives, or unexpected needs. Investors should note the maintenance of a key financial covenant (EBITDA to interest ratio of not less than 3.5 to 1.0) and the standard events of default outlined, which are typical for such agreements.
Key Highlights
- 1Philip Morris International Inc. (PMI) entered into a new US$3.5 billion senior unsecured revolving credit facility.
- 2The new credit facility has a maturity date of October 25, 2016.
- 3The facility replaces PMI's previous credit agreement dated December 4, 2007.
- 4The primary purpose of the new facility is for general corporate purposes.
- 5The agreement requires PMI to maintain an EBITDA to interest ratio of not less than 3.5 to 1.0.
- 6Standard events of default and remedies are included in the credit agreement.
- 7PMI had no outstanding borrowings under the previous credit agreement at the time of termination.