Kraft 2010 Annual Report Download - page 77

In addition to the above, some of our international subsidiaries maintain primarily uncommitted credit lines to meet short-term working capital needs.
Collectively, these credit lines amounted to $2.4 billion at December 31, 2010. Borrowings on these lines amounted to $267 million at December 31, 2010
and $191 million at December 31, 2009.
Cadbury maintained a three-year, £450 million senior unsecured revolving credit facility that we terminated in 2010.
As part of our Cadbury acquisition, on November 9, 2009, we entered into an agreement for a 364-day senior unsecured bridge facility (the "Cadbury Bridge
Facility"). During the first quarter of 2010, we borrowed £807 million under the Cadbury Bridge Facility, and later repaid it ($1,205 million at the time of
repayment) with proceeds from the divestiture of our Frozen Pizza business. Upon repayment, the Cadbury Bridge Facility was terminated.
Long-Term Debt:
On February 8, 2010, we issued $9.5 billion of senior unsecured notes at a weighted-average effective rate of 5.364% and used the net proceeds ($9,379
million) to finance the Cadbury acquisition and for general corporate purposes. The general terms of the $9.5 billion notes are:
• $3.75 billion total principal notes due February 10, 2020 at a fixed, annual interest rate of 5.375%. Interest is payable semiannually beginning
August 10, 2010.
• $3.00 billion total principal notes due February 9, 2040 at a fixed, annual interest rate of 6.500%. Interest is payable semiannually beginning
August 9, 2010.
• $1.75 billion total principal notes due February 9, 2016 at a fixed, annual interest rate of 4.125%. Interest is payable semiannually beginning
August 9, 2010.
• $1.00 billion total principal notes due May 8, 2013 at a fixed, annual interest rate of 2.625%. Interest is payable semiannually beginning
November 8, 2010.
In addition, these notes include covenants that restrict our ability to incur debt secured by liens above a certain threshold. We also must 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 both of the following occur:
(i) a "change of control" triggering event, and
(ii) a downgrade of these notes below an investment grade rating by each of Moody's Investors Service, Inc., Standard & Poor's Ratings Services and
Fitch, Inc. within a specified period.
We expect to continue to comply with our long-term debt covenants.
The fair value of the long-term debt we acquired as part of our Cadbury acquisition was $2,437 million at February 2, 2010. The acquired debt has the
following terms (including U.S. dollar par amounts):
• £77 million (approximately $123 million) total principal notes due December 20, 2010 at a fixed, annual interest rate of 4.875%.
• C$150 million (approximately $140 million) Canadian bank loan agreement expiring August 30, 2012 at a variable interest rate. The interest rate
at December 31, 2010 was 1.573%.
• $1.00 billion total principal notes due October 1, 2013 at a fixed, annual interest rate of 5.125%.
• £300 million (approximately $478 million) total principal notes due December 11, 2014 at a fixed, annual interest rate of 5.375%.
• £350 million (approximately $558 million) total principal notes due July 18, 2018 at a fixed, annual interest rate of 7.250%.
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