Please ensure Javascript is enabled for purposes of website accessibility

Snack Giant Mondelez Secures $1.75 Billion Revolving Credit Line With an Option to Borrow $1 Billion More

By Rhian Hunt - Mar 27, 2020 at 10:40AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company is ensuring that it has cash on hand to keep operating as coronavirus-related disruptions continue.

Mondelez International (MDLZ -0.14%), the beverage and snack giant behind such brands as Oreo, Cadbury, and Nabisco, has joined a growing number of companies obtaining new lines of credit to support their liquidity during the coronavirus turmoil. The company posted its SEC current report online Thursday, providing details of the revolving credit agreement with a group of lenders, with Citibank as the administrative agent. The revolving credit facility gives Mondelez access to $1.75 billion.

Many other companies have drawn down part or all of their available credit during the past week to ensure that they'll have plenty of cash on hand to ride out the pandemic. Mondelez has seemingly not drawn down any of the available $1.75 billion, and the agreement gives it the right to terminate the credit line in whole or in part if it doesn't actually borrow the money.

Many hands grabbing money.

Image source: Getty Images.

The food and beverage company can also optionally request the lenders to provide up to an additional $1 billion in credit at a later date as part of the same arrangement. The credit term is 364 days, and the loans are unsecured. Mondelez will be required to maintain a minimum shareholder equity of $24.6 billion during the period, a standard that's in line with other term loan agreements it has made recently.

Mondelez says that any money drawn down will be used for working capital and for general corporate expenses. With demand for snack and comfort food surging as people self-isolate in the midst of the COVID-19 pandemic, the company decided to give its hourly workers bonuses on March 31, and says it's trying to hire approximately 1,000 more people to meet its production needs. 

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mondelez International, Inc. Stock Quote
Mondelez International, Inc.
MDLZ
$64.20 (-0.14%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.