8-KOther EventsExhibits & Filings

Philip Morris International Inc. 8-K Report, Corporate Update (Nov 15, 2011)

Filed November 15, 2011For Securities:PM

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.

Frequently Asked Questions

This 8-K filing was made to report on the completion of Philip Morris International Inc.'s (PMI) issuance of US$1.5 billion in aggregate principal amount of new debt, specifically US$750 million of 2.900% Notes due 2021 and US$750 million of 4.375% Notes due 2041.

The notes are senior unsecured obligations, meaning they rank equally with other unsecured debts of PMI. The 2021 Notes carry a 2.900% coupon and mature on November 15, 2021, while the 2041 Notes have a 4.375% coupon and mature on November 15, 2041. Interest is payable semi-annually. The issuance is subject to certain covenants, including limitations on secured debt and sale/leaseback transactions.

The underwriters for this offering included Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, Barclays Capital Inc., and HSBC Securities (USA) Inc.

While the 8-K doesn't detail the impact on specific existing debt, it does note that several of the underwriters and their affiliates are lenders under PMI's existing revolving credit facilities, including the 2015 and 2016 Facilities. This suggests ongoing banking relationships and potential cross-over for financing arrangements.