Item 1.01. Entry into a Material Definitive Agreement.
On March 7, 2024, Keurig Dr Pepper Inc. (the “Company”) issued $3.0 billion aggregate principal amount of senior unsecured notes, consisting of $350.0 million aggregate principal amount of Floating Rate Senior Notes due 2027 (the “Floating Rate Notes”), $750.0 million aggregate principal amount of 5.100% Senior Notes due 2027 (the “2027 Notes”), $750.0 million aggregate principal amount of 5.050% Senior Notes due 2029 (the “2029 Notes”), $500.0 million aggregate principal amount of 5.200% Senior Notes due 2031 (the “2031 Notes”) and $650.0 million aggregate principal amount of 5.300% Senior Notes due 2034 (the “2034 Notes” and, together with the 2027 Notes, the 2029 Notes, and the 2031 Notes, the “Fixed Rate Notes,” and together with the Floating Rate Notes, the “Notes”), pursuant to an indenture, dated as of March 7, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Base Indenture”), as supplemented by the First Supplemental Indenture thereto, dated as of March 7, 2024, among the Company, the Subsidiary Guarantors (as defined herein) and U.S. Bank Trust Company, National Association, as trustee (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).
The Floating Rate Notes will bear interest at a floating rate, reset quarterly, equal to the compounded secured overnight financing rate plus 0.880%. Interest on the Floating Rate Notes will be payable on March 15, June 15, September 15 and December 15 of each year, commencing on June 15, 2024. The Floating Rate Notes will mature on March 15, 2027.
Interest on each series of Fixed Rate Notes will be payable on March 15 and September 15 of each year, beginning on September 15, 2024. The 2027 Notes will mature on March 15, 2027, the 2029 Notes will mature on March 15, 2029, the 2031 Notes will mature on March 15, 2031 and the 2034 Notes will mature on March 15, 2034.
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 Fixed Rate 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. The Company may not redeem the Floating Rate Notes prior to maturity. 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.
