Kellogg obtains five-year $2 billion revolver via 24 lenders

By Toni Weeks

San Luis Obispo, Calif., March 4 - Kellogg Co. negotiated an unsecured five-year credit agreement on Feb. 28 with JPMorgan Chase Bank, NA and 24 lenders, according to an 8-K filing with the Securities and Exchange Commission.

The agreement allows Kellogg to borrow on a revolving credit basis up to $2 billion, or the equivalent in other currencies, to obtain letters of credit in an amount not to exceed $75 million and to obtain U.S. swingline loans in a principal amount not in excess of $200 million and European swingline loans in an amount not more than $400 million. The facility also provides a procedure for the lenders to bid on an uncommitted basis on Kellogg's short-term borrowings.

Borrowings bear interest at Libor plus 80.5 basis points to 130 bps, with the exact margin dependent on the company's index debt ratings. There is a facility fee that ranges from 7 bps to 20 bps, also based on ratings.

The facility requires a ratio of consolidated EBITDA to consolidated interest expense to be not less than 4 times for any four consecutive fiscal quarters.

Barclays Bank plc is the syndication agent. Cooperatieve Centrale Raiffeisen-Boerenleenback BA, Rabobank Nederland, New York Branch and Wells Fargo Bank, NA are the documentation agents. J.P. Morgan Securities LLC, Barclays, Cooperatieve Centrale Raiffeisen-Boerenleenbank, Rabobank and Wells Fargo Securities, LLC are joint lead arrangers and joint bookrunners.

In connection to the new facility, Kellogg terminated its existing four-year credit agreement dated March 4, 2011.

No borrowings were outstanding on either the old or new facilities on Feb. 28, the filing stated.

Battle Creek, Mich.-based Kellogg is a maker of cereal and convenience foods.

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