Entry into a Material Definitive Agreement.
On September 29, 2021, Philip Morris International Inc.
(“PMI”) entered into a credit agreement (the “Credit Agreement”)
relating to a senior unsecured revolving credit facility (the
“Facility”) with the lenders named therein, Citibank Europe PLC, UK
Branch, as facility agent, and Citibank, N.A., as swingline agent.
The Facility provides for borrowings up to an aggregate principal
amount of US$2.5 billion (or the equivalent in Euro) and
expires on September 29, 2026, unless extended as further
described in the Credit Agreement.
Interest rates on borrowings under the Facility will be based on
prevailing interest rates for U.S. Dollars or Euro, as applicable,
and as further described in the Credit Agreement. The Facility
maybe used for general corporate purposes. The Credit Agreement
also contains business transformation-linked pricing adjustments
that may result in the reduction or increase in both the interest
rate and commitment fee under the Credit Agreement if PMI achieves,
or fails to achieve, certain specified targets based on its
business transformation goals, specifically to increase the
percentage of PMI’s total net revenues from smoke-free products and
increase the number of markets where PMI’s smoke-free products are
available for sale.
The Credit Agreement contains certain events of default customary
for credit facilities of this type (with customary grace periods,
as applicable), including nonpayment of principal or interest when
due; material incorrectness of representations and warranties when
made; breach of covenants; bankruptcy and insolvency; unsatisfied
ERISA obligations; unstayed material judgment beyond specified
periods; acceleration or payment default of other material
indebtedness; and invalidation of PMI’s guaranty of subsidiary
If any events of default occur and are not cured within applicable
grace periods or waived, any outstanding loans may be accelerated
and the lenders’ commitments may be terminated. The occurrence of a
bankruptcy and insolvency event of default will result in the
automatic termination of commitments and acceleration of
outstanding loans under the Credit Agreement.
Certain of the lenders and their respective affiliates have, from
time to time, performed, and may in the future perform, various
financial advisory, commercial and investment banking services for
PMI, for which they received or will receive customary fees and
expenses. Certain affiliates of the lenders are underwriters of
certain of PMI’s note issuances. PMI and some of its subsidiaries
may enter into foreign exchange and other derivative arrangements
with certain of the lenders and their affiliates. In addition,
certain of the lenders and their respective affiliates act as
dealers in connection with PMI’s commercial paper programs.
The Facility replaces PMI’s existing US$3.5 billion (or the
equivalent in Euro) revolving credit facility with the lenders
named therein and Citibank Europe PLC, UK Branch (legal successor
to Citibank International Limited), as facility agent, and
Citibank, N.A., as swingline agent, which was to expire on
October 1, 2022 (the “Terminated Facility”). The Terminated
Facility was terminated effective September 29, 2021.
At September 29, 2021, PMI had no borrowings outstanding under
the Terminated Facility.
The description above is a summary and is qualified in its entirety
by the Credit Agreement, which is filed as Exhibit 10.1 to this
report and is incorporated herein by reference.
Termination of a Material Definitive Agreement.
The information set forth above under Item 1.01 regarding the
credit agreement governing the Terminated Facility is hereby
incorporated by reference into this Item 1.02.