Item 1.01. Entry into a Material Definitive Agreement.
In connection with the strategic refinancing previously announced on April 7, 2022, on April 22, 2022, Keurig Dr Pepper Inc. (the “Company”) issued $3,000 million aggregate principal amount of senior unsecured notes, consisting of $1,000 million aggregate principal amount of 3.950% Senior Notes due 2029 (the “2029 Notes”), $850 million aggregate principal amount of 4.050% Senior Notes due 2032 (the “2032 Notes”) and $1,150 million aggregate principal amount of 4.500% Senior Notes due 2052 (the “2052 Notes” and, together with the 2029 Notes and the 2032 Notes, the “Notes”), pursuant to an indenture, dated as of December 15, 2009, between the Company (f/k/a Dr Pepper Snapple Group, Inc.) and Computershare Trust Company, N.A., as successor trustee to Wells Fargo Bank, N.A., as trustee (the “Base Indenture”), as supplemented by the Twelfth Supplemental Indenture thereto, dated as of April 22, 2022, among the Company, the Subsidiary Guarantors (as defined herein) and Computershare Trust Company, N.A., as trustee (the “Twelfth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). Interest on each series of Notes will be payable on April 15 and October 15 of each year, beginning on October 15, 2022. The 2029 Notes will mature on April 15, 2029, the 2032 Notes will mature on April 15, 2032 and the 2052 Notes will mature on April 15, 2052. The Notes will not be entitled to any sinking fund. The Notes were issued in an underwritten offering registered under the Securities Act of 1933, as amended.
The Notes are the unsecured and unsubordinated obligations of the Company and rank equally in right of payment with all of the Company’s current and future unsubordinated indebtedness. The Notes are fully and unconditionally guaranteed by certain of the Company’s domestic subsidiaries (each a “Subsidiary Guarantor”) and all of its existing and future subsidiaries that guarantee any of its other indebtedness (each a “Subsidiary Guarantee”). Each such Subsidiary Guarantee is an unsecured and unsubordinated obligation of the Subsidiary Guarantor providing such Subsidiary Guarantee and ranks equally in right of payment with such Subsidiary Guarantor’s current and future unsubordinated indebtedness.
The Company may redeem the Notes of each series, in whole or in part, from time to time, at the applicable redemption price set forth in the Indenture and the applicable note certificates. If a change of control triggering event (as defined in the Indenture) occurs, subject to certain exceptions, the Company must give holders of the Notes the opportunity to sell to the Company their Notes, in whole or in part, at a purchase price equal to 101% of the principal amount, plus any accrued and unpaid interest to, but excluding, the date of purchase.
The Indenture contains customary events of default, including: (i) default in any payment of interest on any Note when due, continued for 30 days, (ii) default in the payment of principal of or premium, if any, on any Note when due, (iii) failure by the Company to comply with its obligations under the Indenture, in certain cases subject to notice and grace periods and (iv) specified events involving bankruptcy, insolvency or reorganization of the Company or certain of its subsidiaries.
The Company and its majority-owned subsidiaries are subject to certain negative covenants under the Indenture, including limitations on the ability of the Company and each such subsidiary to, among other things: (i) incur indebtedness secured by principal properties, (ii) enter into certain sale and leaseback transactions with respect to principal properties and (iii) enter into certain mergers, consolidations and transfers of substantially all of its assets.
The summary of the terms and provisions of the Notes and the Indenture set forth in this Item 1.01 is not complete and is qualified in its entirety by reference to the full and complete text of the Base Indenture (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 23, 2009) and the Twelfth Supplemental Indenture (filed as Exhibit 4.1 to this Current Report on Form 8-K), including the form of each series of the Notes (in global form) attached as exhibits thereto, which are incorporated by reference herein.
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 under Item 1.01 above with respect to the Notes and the Indenture is incorporated into this Item 2.03 by reference insofar as it relates to the creation of a direct financial obligation.
