Item 1.01. Entry into a Material Definitive Agreement.
On July 8, 2022, Kraft Heinz Foods Company ("KHFC") and The Kraft Heinz Company
(the "Company") entered into a new Credit Agreement (the "Credit Agreement")
with JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank,
N.A., BofA Securities, Inc., Barclays Bank PLC, Citibank, N.A., Deutsche Bank
Securities Inc., Morgan Stanley Senior Funding, Inc., Royal Bank of Canada, and
Wells Fargo Securities, LLC, as revolving joint lead arrangers and revolving
joint bookrunners, Bank of America, N.A., Barclays Bank PLC, Citibank, N.A.,
Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc., Royal Bank
of Canada, and Wells Fargo Bank, National Association, as revolving syndication
agents, and the lenders named therein.
The Credit Agreement replaces KHFC's and the Company's existing $4.0 billion
revolving credit facility that was scheduled to mature on July 6, 2025 (the
"Existing Credit Agreement"). The Credit Agreement provides for a five-year
senior unsecured revolving credit facility in an aggregate amount of
$4.0 billion (the "New Revolving Credit Facility"). The New Revolving Credit
Facility includes a $1.0 billion sublimit for borrowings in Canadian dollars,
euro, or British pound sterling as well as a swingline sub-facility of up to
$400 million, a letter of credit sub-facility of up to $300 million, and a
competitive bid loan facility under which Borrowers (defined below) may borrow
on a non-ratable basis from one or more of the lenders under the New Revolving
Credit Facility. Additionally, and subject to certain conditions, KHFC may
increase the amount of revolving commitments and/or add tranches of term loans
to KHFC in a combined aggregate amount of up to $1.0 billion.
The New Revolving Credit Facility is available to KHFC and any wholly owned
subsidiary of KHFC designated by KHFC (each, a "Subsidiary Borrower" and,
together with KHFC, the "Borrowers") and will mature on July 8, 2027. KHFC may
periodically request the extension of the revolving maturity date by one year
periods. The New Revolving Credit Facility may be prepaid at any time and unused
commitments may be reduced at any time, in whole or in part, at the option of
the borrower, without premium or penalty (subject to notice periods and minimum
amounts). The competitive bid loans may not be prepaid except as on the terms
set forth in the applicable competitive bid note evidencing the competitive bid
loan.
The obligations under the New Revolving Credit Facility are guaranteed by KHFC
and the Company in the case of indebtedness and other liabilities of any
Subsidiary Borrower.
Interest rates on obligations under the New Revolving Credit Facility are based
on prevailing annual interest rates for Term SOFR/EURIBOR/CDOR loans or an
alternative base rate/Canadian prime rate, in each case subject to an applicable
margin based upon the long-term senior unsecured, non-credit enhanced debt
rating assigned to KHFC.
KHFC will pay certain recurring fees with respect to the New Revolving Credit
Facility, including (1) fees on the unused commitments of the lenders under the
New Revolving Credit Facility, and (2) a participation fee and fronting fee on
the aggregate face amounts of outstanding letters of credit.
The Credit Agreement also contains customary representations, covenants, and
events of default.
The financial institutions party to the Credit Agreement have performed and may
continue to perform commercial banking and financial services for KHFC and/or
the Company for which they have received and will continue to receive customary
fees.
The foregoing description of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Credit Agreement, which is filed hereto as Exhibit 10.1.
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Item 1.02. Termination of a Material Definitive Agreement.
On July 8, 2022, in connection with KHFC's and the Company's entry into the
Credit Agreement, the Existing Credit Agreement, dated as of July 6, 2015, by
and among KHFC (formerly known as H. J. Heinz Company), the Company (formerly
known as H.J. Heinz Holding Corporation), the lenders party thereto, JPMorgan
Chase Bank, N.A., as administrative agent, and JPMorgan Europe Limited, as
London agent, as amended from time to time, was terminated.
The Existing Credit Agreement provided for a revolving credit facility of up to
$4.1 billion through July 6, 2023 and up to $4.0 billion from July 6, 2023
through maturity on July 6, 2025. The obligations under the Existing Credit
Agreement were guaranteed by KHFC and the Company in the case of indebtedness
and other liabilities of any subsidiary borrower.
The financial institutions party to the Existing Credit Agreement have performed
and may continue to perform commercial banking and financial services for KHFC
and/or the Company for which they have received and will continue to receive
customary fees.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above in Item 1.01 is incorporated by reference into
this Item 2.03.
Item 8.01. Other Events.
As previously described in the Company's Quarterly Report on Form 10-Q for the
period ended March 26, 2022, during the fourth quarter of the Company's 2021
fiscal year, certain organizational changes were announced that impacted the
Company's internal reporting and reportable segments beginning in the second
quarter of the Company's 2022 fiscal year. As a result of these changes, the
Company combined its United States and Canada zones to form the North America
zone. Effective in the second quarter of its 2022 fiscal year, the Company
manages and reports its operating results through two reportable segments
defined by geographic region: North America and International.
Prior to the reorganization of the Company's reportable segments in the second
quarter of fiscal year 2022, the Company managed and reported its operating
results through three reportable segments defined by geographic region: United
States, International, and Canada. Accordingly, the Company is providing
supplemental historical segment financial information, which conforms to the new
reportable segment structure, in Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are filed with this Current Report on Form 8-K.
Exhibit No. Description
10.1 Credit Agreement, dated July 8, 2022, among The Kraft Heinz
Company, Kraft Heinz Foods Company, the initial lenders party
thereto, and JPMorgan Chase Bank, N.A., as administrative agent.
99.1 Supplemental Historical Financial Information by New Reportable
Segments for the years ended December 25, 2021, December 26,
2020, and December 28, 2019, and for each of the quarters ended
March 27, 2021, June 26, 2021, September 25, 2021, December 25,
2021, and March 26, 2022.
104 The cover page of The Kraft Heinz Company's Current Report on
Form 8-K dated July 8, 2022, formatted in inline XBRL.
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