Kraft 2009 Annual Report Download - page 80

On May 22, 2008, we issued $2.0 billion of senior unsecured notes and used the net proceeds ($1,967 million) for general corporate purposes,
including the repayment of borrowings under the 364-day bridge facility agreement we used to acquire LU Biscuit and other short-term borrowings.
The general terms of the $2.0 billion notes are:
• $1,250 million total principal notes due August 23, 2018 at a fixed, annual interest rate of 6.125%. Interest is payable semiannually,
and began February 23, 2009.
• $750 million total principal notes due January 26, 2039 at a fixed, annual interest rate of 6.875%. Interest is payable semiannually, and
began on January 26, 2009.
On March 20, 2008, we issued €2.85 billion (approximately $4.5 billion) of senior unsecured notes and used the net proceeds (approximately
$4,470 million) to repay a portion of the 364-day bridge facility agreement we used to acquire LU Biscuit. The general terms of the €2.85 billion
notes are:
• €2.0 billion (approximately $3.2 billion) total principal notes due March 20, 2012 at a fixed, annual interest rate of 5.750%. Interest is
payable annually, and began March 20, 2009.
• €850 million (approximately $1.3 billion) total principal notes due March 20, 2015 at a fixed, annual interest rate of 6.250%. Interest is
payable annually, and began March 20, 2009.
The notes from the above issuances include covenants that restrict our ability to incur debt secured by liens above a certain threshold. We are
also required to offer to purchase these notes at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the
date of repurchase, if we experience both of the following:
(i) a “change of control” triggering event, and
(ii) a downgrade of these notes below an investment grade rating by each of Moody’s, Standard & Poor’s and Fitch within a specified
period.
We expect to continue to comply with our long-term debt covenants.
At December 31, 2009 and 2008, our long-term debt consisted of (interest rates were as of December 31, 2009):
2009 2008
(in millions)
Notes, 0.77% to 7.55% (average effective rate 6.23%), due through 2039 $ 14,395 $ 15,130
Euro notes, 5.75% to 6.25% (average effective rate 5.98%), due through 2015 4,072 3,970
7% Debenture (effective rate 11.32%), $200 million face amount, due 2011 - 182
Other foreign currency obligations 5 11
Capital leases and other 65 61
Total long-term debt 18,537 19,354
Less current portion of long term debt (513) (765)
Long-term debt $ 18,024 $ 18,589
As of December 31, 2009, aggregate maturities of long-term debt were (in millions):
2010 $ 513
2011 2,014
2012 4,373
2013 1,556
2014 506
Thereafter 9,640
On September 3, 2009, we redeemed our November 2011, 7% $200 million debenture at par value. Upon redemption, we recorded a loss of $14
million within interest and other expense, net which represented the write-off of the remaining discount. On November 12, 2009, we repaid $750
million in notes, and on October 1, 2008, we repaid $700 million in notes. These repayments were primarily financed from commercial paper
issuances.
77
Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠