The press release from PepsiCo, Inc. dated May 23, 2025, announced a 364-day credit agreement of $5,000,000,000 with various financial institutions. The agreement is intended for general corporate purposes, including working capital, capital investments, and acquisitions. The press release details the terms and conditions of the agreement, including definitions and accounting terms, amounts and terms of the advances, conditions to effectiveness and lending, representations and warranties, covenants of the company, events of default, and miscellaneous provisions.
The agreement includes a provision for Advances, which are defined as an advance by a Lender to a Borrower as part of a Borrowing and can be of the Base Rate Advance, Eurocurrency Rate Advance, or Term SOFR Advance type. The Base Rate is defined as a fluctuating interest rate per annum, which is determined by various factors and is used as a reference point for pricing some loans.
Additionally, the agreement outlines the conditions precedent to each borrowing, representations and warranties of the company, affirmative and negative covenants, events of default, and the role and authority of the administrative agent.
Moreover, the agreement includes provisions related to amendments, notices, waivers, costs and expenses, assignments and participations, confidentiality, governing law, and jurisdiction, among others.
The press release highlights the importance of various definitions and terms, including the Company, Borrowing, Business Day, Debt, and Affirmative Covenants, to ensure clarity and understanding of the agreement.
The detailed terms and conditions of the credit agreement demonstrate PepsiCo's commitment to securing financial support for its corporate activities and investments, providing a clear framework for the borrowing and lending processes. The market has reacted to these announcements by moving the company's shares -0.6% to a price of $129.34. For the full picture, make sure to review PEPSICO INC's 8-K report.
