Terms Agreement dated March 17, 2020 (incorporating the PepsiCo, Inc. Underwriting Agreement Standard Provisions dated as of November 18, 2019) among PepsiCo and BofA Securities, Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC as representatives of the several underwriters named therein
2.250% Senior Notes due 2025
2.625% Senior Notes due 2027
2.750% Senior Notes due 2030
3.500% Senior Notes due 2040
3.625% Senior Notes due 2050
3.875% Senior Notes due 2060
March 17, 2020
700 Anderson Hill Road
Purchase, New York 10577
Ladies and Gentlemen:
We understand that PepsiCo, Inc., a North Carolina corporation (the “Company”), proposes to issue and sell $1,500,000,000 of its 2.250% Senior Notes due 2025 (the “2025 Notes”), $500,000,000 of its 2.625% Senior Notes due 2027 (the “2027 Notes”), $1,500,000,000 of its 2.750% Senior Notes due 2030 (the “2030 Notes”), $750,000,000 of its 3.500% Senior Notes due 2040 (the “2040 Notes”), $1,500,000,000 of its 3.625% Senior Notes due 2050 (the “2050 Notes”) and $750,000,000 of its 3.875% Senior Notes due 2060 (the “2060 Notes,” and together with the 2025 Notes, 2027 Notes, 2030 Notes, 2040 Notes and 2050 Notes, the “Underwritten Securities”) subject to the terms and conditions stated herein and in the PepsiCo, Inc. Underwriting Agreement Standard Provisions dated as of November 18, 2019 filed with the Securities and Exchange Commission on November 18, 2019 as Exhibit 1.2 to the Company’s Registration Statement on Form S-3 (File No. 333-234767) (the “Standard Provisions”). Each of the applicable provisions in the Standard Provisions (including defined terms) is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein. We, the underwriters named below (the “Underwriters”), offer to purchase, severally and not jointly, the amount of Underwritten Securities opposite our names set forth below at a purchase price equal to 99.579% of the principal amount thereof for the 2025 Notes, 99.087% of the principal amount thereof for the 2027 Notes, 99.013% of the principal amount thereof for the 2030 Notes, 98.607% of the principal amount thereof for the 2040 Notes, 98.599% of the principal amount thereof for the 2050 Notes and 97.544% of the principal amount thereof for the 2060 Notes.
|Principal Amount of|
|Underwriters||2025 Notes||2027 Notes||2030 Notes||2040 Notes||2050 Notes||2060 Notes|
|BofA Securities, Inc.||$||350,000,000||$||116,667,000||$||350,000,000||$||175,000,000||$||350,000,000||$||175,000,000|
|Citigroup Global Markets Inc.||350,000,000||116,667,000||350,000,000||175,000,000||350,000,000||175,000,000|
|J.P. Morgan Securities LLC||350,000,000||116,666,000||350,000,000||175,000,000||350,000,000||175,000,000|
|BNP Paribas Securities Corp.||75,000,000||25,000,000||75,000,000||37,500,000||75,000,000||37,500,000|
|Deutsche Bank Securities Inc.||75,000,000||25,000,000||75,000,000||37,500,000||75,000,000||37,500,000|
|HSBC Securities (USA) Inc.||75,000,000||25,000,000||75,000,000||37,500,000||75,000,000||37,500,000|
|Barclays Capital Inc.||45,000,000||15,000,000||45,000,000||22,500,000||45,000,000||22,500,000|
|BBVA Securities Inc.||45,000,000||15,000,000||45,000,000||22,500,000||45,000,000||22,500,000|
|TD Securities (USA) LLC||45,000,000||15,000,000||45,000,000||22,500,000||45,000,000||22,500,000|
|ANZ Securities, Inc.||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|ING Financial Markets LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|PNC Capital Markets LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|RBC Capital Markets, LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|SG Americas Securities, LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|UBS Securities LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|U.S. Bancorp Investments, Inc.||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|Drexel Hamilton, LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|Loop Capital Markets LLC||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
|Samuel A. Ramirez & Company, Inc.||9,000,000||3,000,000||9,000,000||4,500,000||9,000,000||4,500,000|
The Underwriters agree to reimburse the Company for $4,987,500 of its expenses incurred in connection with the offering of the Underwritten Securities; such reimbursement to occur simultaneously with the purchase and sale of the Underwritten Securities at the Closing Time.
Section 9(f) of the Standard Provisions shall apply to this Agreement.
For purposes of Section 21 of the Standard Provisions, the identified provisions are: (i) the fifth paragraph of text under the caption “Underwriting” in such preliminary prospectus, Time of Sale Prospectus and the Prospectus; (ii) the third sentence of the seventh paragraph of text under the caption “Underwriting” in such preliminary prospectus, Time of Sale Prospectus and the Prospectus; (iii) the eighth paragraph of text under the caption “Underwriting” in such preliminary prospectus, Time of Sale Prospectus and the Prospectus; and (iv) the tenth and eleventh paragraphs of text under the caption “Underwriting” in such preliminary prospectus, Time of Sale Prospectus and the Prospectus.
The undersigned are acting as the “Representative” under the Standard Provisions (the “Representatives”). The Representatives represent and warrant that they are duly authorized to execute and deliver this Terms Agreement on behalf of the several Underwriters named above.
The Underwritten Securities and the offering thereof shall have the following additional terms:
|Trade Date:||March 17, 2020|
|Time of Sale:||5:00 p.m. New York Time on the Trade Date|
|Settlement Date (T+2):||March 19, 2020|
|Closing Time:||9:00 a.m. New York Time on the Settlement Date|
|Closing Location:||New York, New York|
|Time of Sale Prospectus:||Base prospectus dated November 18, 2019, preliminary prospectus supplement dated March 17, 2020 and free writing prospectus dated March 17, 2020|
|Title of Securities:||2.250% Senior Notes due 2025||2.625% Senior Notes due 2027||2.750% Senior Notes due 2030||3.500% Senior Notes due 2040||3.625% Senior Notes due 2050||3.875% Senior Notes due 2060|
|Aggregate Principal Amount Offered:||$1,500,000,000||$500,000,000||$1,500,000,000||$750,000,000||$1,500,000,000||$750,000,000|
|Maturity Date:||March 19, 2025||March 19, 2027||March 19, 2030||March 19, 2040||March 19, 2050||March 19, 2060|
|Interest Payment Dates:||Semi-annually on each March 19 and September 19, commencing on September 19, 2020||Semi-annually on each March 19 and September 19, commencing on September 19, 2020||Semi-annually on each March 19 and September 19, commencing on September 19, 2020||Semi-annually on each March 19 and September 19, commencing on September 19, 2020||Semi-annually on each March 19 and September 19, commencing on September 19, 2020||Semi-annually on each March 19 and September 19, commencing on September 19, 2020|
|Benchmark Treasury:||1.125% due February 28, 2025||1.125% due February 28, 2027||1.500% due February 15, 2030||2.375% due November 15, 2049||2.375% due November 15, 2049||2.375% due November 15, 2049|
|Benchmark Treasury Yield:||0.665%||0.906%||1.012%||1.654%||1.654%||1.654%|
|Spread to Treasury:||+160 basis points||+180 basis points||+180 basis points||+190 basis points||+200 basis points||+230 basis points|
|Price to Public:||99.929%||99.487%||99.463%||99.232%||99.474%||98.419%|
|Optional Redemption:||Prior to February 19, 2025, make-whole call at Treasury rate plus 25 basis points; par call at any time on or after February 19, 2025||Prior to January 19, 2027, make-whole call at Treasury rate plus 30 basis points; par call at any time on or after January 19, 2027||Prior to December 19, 2029, make-whole call at Treasury rate plus 30 basis points; par call at any time on or after December 19, 2029||Prior to September 19, 2039, make-whole call at Treasury rate plus 30 basis points; par call at any time on or after September 19, 2039||Prior to September 19, 2049, make-whole call at Treasury rate plus 30 basis points; par call at any time on or after September 19, 2049||Prior to September 19, 2059, make-whole call at Treasury rate plus 35 basis points; par call at any time on or after September 19, 2059|
|Net Proceeds to PepsiCo (Before Expenses):||$1,493,685,000||$495,435,000||$1,485,195,000||$739,552,500||$1,478,985,000||$731,580,000|
|Use of Proceeds:||PepsiCo intends to use the net proceeds from this offering for general corporate purposes, including the repayment of commercial paper.|
|Day Count Fraction:||30/360||30/360||30/360||30/360||30/360||30/360|
|CUSIP / ISIN:||713448 EQ7 / US713448EQ79||713448 ER5 / US713448ER52||713448 ES3 / US713448ES36||713448 ET1 / US713448ET19||713448 EU8 / US713448EU81||713448 EV6 / US713448EV64|
|Minimum Denomination:||$2,000 and integral multiples of $1,000|
|Joint Book-Running Managers:||BofA Securities, Inc.|
Citigroup Global Markets Inc.
J.P. Morgan Securities LLC
|Senior Co-Managers:||BNP Paribas Securities Corp.|
Deutsche Bank Securities Inc.
HSBC Securities (USA) Inc.
Barclays Capital Inc.
BBVA Securities Inc.
TD Securities (USA) LLC
|Co-Managers:||ANZ Securities, Inc.|
ING Financial Markets LLC
PNC Capital Markets LLC
RBC Capital Markets, LLC
SG Americas Securities, LLC
UBS Securities LLC
U.S. Bancorp Investments, Inc.
Drexel Hamilton, LLC
Loop Capital Markets LLC
Samuel A. Ramirez & Company, Inc.
|Address for Notices to the Representatives:|| |
BofA Securities, Inc.
Citigroup Global Markets Inc.
J.P. Morgan Securities LLC
IN WITNESS WHEREOF, the parties hereto have executed this Terms Agreement as of the date first above written.
|By:||/s/ Hugh F. Johnston|
|Name:||Hugh F. Johnston|
|Title:||Executive Vice President and Chief Financial Officer|
|By:||/s/ Kenneth Smith|
|Title:||Senior Vice President, Finance and Treasurer|
CONFIRMED AND ACCEPTED, as of the date first above written:
BOFA SECURITIES, INC.
CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES LLC
as Representatives of the several Underwriters
|By:||BOFA SECURITIES, INC.|
|By:||/s/ Laurie Campbell|
|By:||CITIGROUP GLOBAL MARKETS INC.|
|By:||/s/ Brian D. Bednarski|
|Name:||Brian D. Bednarski|
|By:||J.P. MORGAN SECURITIES LLC|
|By:||/s/ Robert Bottamedi|
Time of Sale Prospectus:
|1.||Preliminary Prospectus dated March 17, 2020 (including the Base Prospectus dated November 18, 2019)|
|2.||Any free writing prospectuses approved by the Representatives and filed by the Company under Rule 433(d) under the Securities Act|
|3.||Final Term Sheet dated March 17, 2020 to be filed by the Company pursuant to Rule 433 under the Securities Act setting forth certain terms of the Underwritten Securities|