Snack Giant Mondelez Secures $ 1.75 Billion Revolving Line of Credit with Additional $ 1 Billion Borrowing Option


Mondelez International (NASDAQ: MDLZ), the beverage and snack giant behind brands such as Oreo, Cadbury and Nabisco, has joined a growing number of companies securing new lines of credit to support their liquidity during the coronavirus crisis. The company released its current SEC report online Thursday, providing details of the revolving credit agreement with a group of lenders, with Citibank as its administrative agent. The revolving credit facility gives Mondelez access to $ 1.75 billion.

Many other businesses have used some or all of their available credit over the past week to ensure they will have enough cash to weather the pandemic. Mondelez apparently hasn’t taken any of the $ 1.75 billion available, and the deal gives him the right to terminate the line of credit in whole or in part if he doesn’t actually borrow the money.

Image source: Getty Images.

The food and beverage company can also ask lenders to provide up to $ 1 billion in additional credit at a later date under the same deal. The term of credit is 364 days and the loans are unsecured. Mondelez will need to maintain a minimum share capital of $ 24.6 billion during the period, a standard in line with other term loan agreements it recently entered into.

Mondelez says all the money raised will be used for working capital and general corporate expenses. With demand for snacks and comfort foods increasing as people self-isolate amid the COVID-19 pandemic, the company decided to give hourly bonuses to its workers on March 31 and says that she is trying to hire around 1,000 more people to meet her production needs.

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