Keurig Dr Pepper Inc.
10/25/2024 | Press release | Distributed by Public on 10/25/2024 14:08
Financial Obligation Form 8 K
Item 1.01. Entry into a Material Definitive Agreement.
On October 25, 2024, Keurig Dr Pepper Inc. (the "Company") entered into a new term loan agreement (the "Term Loan Agreement") among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent.
The Term Loan Agreement provides for a delayed draw term loan facility in an aggregate principal amount of $1.25 billion, available in a first tranche of $1 billion and second tranche of $250 million. The proceeds of the Term Loan Agreement, if drawn, may be used by the Company for general corporate purposes, including to finance acquisitions (including the payment of any fees and expenses incurred in connection therewith). Borrowings under the Term Loan Agreement are unsecured. Borrowings under the first tranche and second tranche must be repaid on April 25, 2026, and February 23, 2027, respectively.
The interest rate applicable to borrowings under the Term Loan Agreement ranges from (i) a rate equal to SOFR plus a spread adjustment of 0.100% and a margin of 0.875% to 1.500% to (ii) a rate equal to a base rate plus a margin of 0.000% to 0.500%, in each case depending on the credit rating of the Company as determined by Moody's and S&P.
The Term Loan Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on the Company and its subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, the Company and its subsidiaries from taking certain actions, including, without limitation, incurring liens, consummating certain fundamental changes and entering into transactions with affiliates, (iii) a financial covenant in the form of an interest coverage ratio and (iv) customary events of default (including a change of control) for financings of this type.
The foregoing summary of the Term Loan Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Term Loan Agreement, which will be filed as an exhibit to the Company's Annual Report on Form 10-K for the year ending December 31, 2024.