Kraft Foods arranges $3 billion senior unsecured revolver due 2019

By Toni Weeks

San Luis Obispo, Calif., May 29 - Kraft Foods Group, Inc. entered into an agreement that provides for a five-year $3 billion senior unsecured revolving credit facility on May 29, according to an 8-K filing with the Securities and Exchange Commission.

The total amount includes $300 million for letters of credit.

The agreement, which matures May 29, 2019, may be extended by successive one-year or two-year periods, provided that it does not ever have a maturity that exceeds five years. In addition, there is an accordion feature to increase the facility by up to $1 billion with lender commitment.

Borrowings bear interest at Libor plus a spread, with the exact margin based on the company's long-term senior unsecured debt.

The agreement requires Kraft to maintain a minimum total shareholders' equity of at least $2.4 billion.

Borrowings will be used for general corporate purposes, including working capital purposes and commercial paper issuances.

In connection with the new agreement, the company terminated its existing $3 billion five-year revolver dated May 18, 2012. No early termination penalties were incurred as a result of the termination.

JPMorgan Chase Bank, NA and Barclays Bank plc are the administrative agents. J.P. Morgan Securities LLC, Barclays Bank plc, Citigroup Global Markets Inc. and RBS Securities Inc. are the joint lead arrangers and joint bookrunners.

Northfield, Ill.-based Kraft is a food company.

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