Debt Obligations and Commitments

12 Months Ended

Dec. 28, 2019

Debt Obligations and Commitments [Abstract]

Debt Obligations

The following table summarizes our debt obligations:



	2019^(a)			2018^(a)
Short-term debt obligations^(b)
Current maturities of long-term debt	$	2,848		$	3,953
Other borrowings (6.4% and 6.0%)	72			73
	$	2,920		$	4,026
Long-term debt obligations ^(b)
Notes due 2019 (3.1%)	—			3,948
Notes due 2020 (2.7% and 3.9%)	2,840			3,784
Notes due 2021 (2.4% and 3.1%)	3,276			3,257
Notes due 2022 (2.7% and 2.8%)	3,831			3,802
Notes due 2023 (2.8% and 2.9%)	1,272			1,270
Notes due 2024 (3.4% and 3.2%)	1,839			1,816
Notes due 2025-2049 (3.4% and 3.7%)	18,910			14,345
Other, due 2019-2026 (1.3% and 1.3%)	28			26
	31,996			32,248
Less: current maturities of long-term debt obligations	(2,848		)	(3,953		)
Total	$	29,148		$	28,295


(a)	Amounts are shown net of unamortized net discounts of $163 million and $119 million for 2019 and 2018, respectively.


(b)	The interest rates presented reflect weighted-average effective interest rates at year-end. Certain of our fixed rate indebtedness have been swapped to floating rates through the use of interest rate derivative instruments. See Note 9 for further information regarding our interest rate derivative instruments.

As of December 28, 2019, our international debt of $69 million was related to borrowings from external parties including various lines of credit. These lines of credit are subject to normal banking terms and conditions and are fully committed at least to the extent of our borrowings.

In 2019, we issued the following senior notes:



Interest Rate		Maturity Date	Amount^(a)
0.750	%	March 2027	€	500	^(b)
1.125	%	March 2031	€	500	^(b)
2.625	%	July 2029	$	1,000
3.375	%	July 2049	$	1,000
0.875	%	October 2039	€	500	^(b)
2.875	%	October 2049	$	1,000


(a)	Represents gross proceeds from issuances of long-term debt excluding debt issuance costs, discounts and premiums.


(b)	These notes, issued in euros, were designated as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries.

The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper, except for an amount equivalent to the net proceeds from our 2.875% senior notes due 2049 that will be used to fund, in whole or in part, eligible green projects in the categories of investments in sustainable plastics and packaging, decarbonizing our operations and supply chain and water sustainability, which promote our selected Sustainable Development Goals, as defined by the United Nations.

In 2019, we entered into a new five-year unsecured revolving credit agreement (Five-Year Credit Agreement) which expires on June 3, 2024. The Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to $3.75 billion in U.S. dollars and/or euros, including a $0.75 billion swing line subfacility for euro-denominated borrowings permitted to be borrowed on a same-day basis, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $4.5 billion (or the equivalent amount in euros). Additionally, we may, once a year, request renewal of the agreement for an additional one-year period.

In 2019, we entered into a new 364-day unsecured revolving credit agreement (364-Day Credit Agreement) which expires on June 1, 2020. The 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to $3.75 billion in U.S. dollars and/or euros, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $4.5 billion (or the equivalent amount in euros). We may request renewal of this facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which would mature no later than the anniversary of the then effective termination date. The Five-Year Credit Agreement and the 364-Day Credit Agreement together replaced our $3.75 billion five-year credit agreement and our $3.75 billion 364-day credit agreement, both dated as of June 4, 2018. Funds borrowed under the Five-Year Credit Agreement and the 364-Day Credit Agreement may be used for general corporate purposes. Subject to certain conditions, we may borrow, prepay and reborrow amounts under these agreements. As of December 28, 2019, there were no outstanding borrowings under the Five-Year Credit Agreement or the 364-Day Credit Agreement.

In 2019, we entered into two unsecured bridge loan facilities (Bridge Loan Facilities) which together enable one of our consolidated subsidiaries to borrow up to 25.0 billion South African rand, or approximately $1.8 billion, to provide potential funding for our acquisition of Pioneer Foods. Each facility is available from the date the conditions precedent are met for the acquisition up through July 30, 2020 in the case of one facility and July 31, 2020 in the case of the other facility. Borrowings under the facilities are for up to one year once drawn and can be prepaid at any time. Interest rates are reset either every one month or three months. As of December 28, 2019, there were no outstanding borrowings under the Bridge Loan Facilities.

In 2019, we paid $1.0 billion to redeem all $1.0 billion outstanding principal amount of our 4.50% senior notes due 2020.

In 2018, we completed a cash tender offer for certain notes issued by PepsiCo and predecessors to a PepsiCo subsidiary for $1.6 billion in cash to redeem the following amounts:



Interest Rate		Maturity Date	Amount Tendered
7.290	%	September 2026	$	11
7.440	%	September 2026	$	4
7.000	%	March 2029	$	357
5.500	%	May 2035	$	138
4.875	%	November 2040	$	410
5.500	%	January 2040	$	408

Also in 2018, we completed an exchange offer for certain notes issued by predecessors to a PepsiCo subsidiary for the following newly issued PepsiCo notes. These notes were issued in an aggregate principal amount equal to the exchanged notes:



Interest Rate		Maturity Date	Amount Exchanged
7.290	%	September 2026	$	88
7.440	%	September 2026	$	21
7.000	%	March 2029	$	516
5.500	%	May 2035	$	107

As a result of the above transactions, we recorded a pre-tax charge of $253 million ($191 million after-tax or $0.13 per share) to interest expense in 2018, primarily representing the tender price paid over the carrying value of the tendered notes.