Summary
Philip Morris International Inc. (PM) filed an 8-K on November 15, 2011, to report on the issuance of new debt. The company successfully raised US$1.5 billion through a dual-tranche offering, consisting of US$750 million in 2.900% Notes due 2021 and US$750 million in 4.375% Notes due 2041. This action indicates a strategic move to access capital for its operations and potential future investments. The issuance of these senior unsecured notes, governed by an Indenture and a specific Terms Agreement with several prominent underwriters, signifies the company's continued access to public debt markets. The terms include customary covenants restricting the incurrence of secured debt and sale/leaseback transactions, along with provisions for redemption under specific tax events. Investors should note that these notes rank equally with other senior unsecured obligations of PMI.
Key Highlights
- 1PMI issued US$1.5 billion in aggregate principal amount of notes.
- 2The offering comprised two tranches: US$750 million of 2.900% Notes due 2021 and US$750 million of 4.375% Notes due 2041.
- 3The notes were issued under an Indenture dated April 25, 2008, with HSBC Bank USA, National Association, as trustee.
- 4A Terms Agreement with major underwriters, including Citigroup, Goldman Sachs, J.P. Morgan, Barclays, and HSBC, was executed on November 8, 2011.
- 5The notes are senior unsecured obligations and will rank equally with PMI's existing and future senior unsecured indebtedness.
- 6Customary covenants limit PMI's ability to incur secured debt and engage in sale/leaseback transactions, with exceptions.
- 7PMI may redeem the notes upon specified tax events.