Terms Agreement dated October 6, 2021 (incorporating the PepsiCo, Inc. Underwriting Agreement Standard Provisions dated as of November 18, 2019) among PepsiCo and BofA Securities, Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC as Representatives of the several underwriters named therein
Exhibit 1.1
PEPSICO, INC.
1.950% Senior Notes due 2031
2.625% Senior Notes due 2041
2.750% Senior Notes due 2051
TERMS AGREEMENT
October 6, 2021
To: | PepsiCo, Inc. 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 $1,250,000,000 of its 1.950% Senior Notes due 2031 (the “2031 Notes”), $750,000,000 of its 2.625% Senior Notes due 2041 (the “2041 Notes”) and $1,000,000,000 of its 2.750% Senior Notes due 2051 (the “2051 Notes,” and together with the 2031 Notes and 2041 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 99.180% of the principal amount thereof for the 2031 Notes, 99.220% of the principal amount thereof for the 2041 Notes and 98.477% of the principal amount thereof for the 2051 Notes.
Principal Amount of | ||||||||||||
Underwriters | 2031 Notes | 2041 Notes | 2051 Notes | |||||||||
BofA Securities, Inc. | $ | 187,500,000 | $ | 112,500,000 | $ | 150,000,000 | ||||||
Citigroup Global Markets Inc. | 187,500,000 | 112,500,000 | 150,000,000 | |||||||||
Deutsche Bank Securities Inc. | 187,500,000 | 112,500,000 | 150,000,000 | |||||||||
J.P. Morgan Securities LLC | 187,500,000 | 112,500,000 | 150,000,000 | |||||||||
Goldman Sachs & Co. LLC | 93,750,000 | 56,250,000 | 75,000,000 | |||||||||
HSBC Securities (USA) Inc. | 93,750,000 | 56,250,000 | 75,000,000 | |||||||||
Mizuho Securities USA LLC | 93,750,000 | 56,250,000 | 75,000,000 | |||||||||
Morgan Stanley & Co. LLC | 93,750,000 | 56,250,000 | 75,000,000 | |||||||||
ANZ Securities, Inc. | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
CastleOak Securities, L.P. | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
ING Financial Markets LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
Loop Capital Markets LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
PNC Capital Markets LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
RBC Capital Markets, LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
Siebert Williams Shank & Co., LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
SG Americas Securities, LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
UBS Securities LLC | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
U.S. Bancorp Investments, Inc. | 12,500,000 | 7,500,000 | 10,000,000 | |||||||||
Total | $ | 1,250,000,000 | $ | 750,000,000 | $ | 1,000,000,000 |
The Underwriters agree to reimburse the Company for $2,250,000 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 eleventh and twelfth 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 signature of any signatory to this Agreement may be manual or facsimile (including, for the avoidance of doubt, electronic).
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The Underwritten Securities and the offering thereof shall have the following additional terms:
Issuer: | PepsiCo, Inc. | ||
Trade Date: | October 6, 2021 | ||
Time of Sale: | 5:35 P.M. New York time on the Trade Date | ||
Settlement Date (T+10): | October 21, 2021 | ||
Closing Time: | 9:00 AM 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 October 6, 2021 and free writing prospectus dated October 6, 2021 | ||
Title of Securities: | 1.950% Senior Notes due 2031 | 2.625% Senior Notes due 2041 | 2.750% Senior Notes due 2051 |
Aggregate Principal Amount Offered: | $1,250,000,000 | $750,000,000 | $1,000,000,000 |
Maturity Date: | October 21, 2031 | October 21, 2041 | October 21, 2051 |
Interest Payment Dates: | Semi-annually on each April 21 and October 21, commencing April 21, 2022 | Semi-annually on each April 21 and October 21, commencing April 21, 2022 | Semi-annually on each April 21 and October 21, commencing April 21, 2022 |
Benchmark Treasury: | 1.250% due August 15, 2031 | 1.750% due August 15, 2041 | 2.375% due May 15, 2051 |
Benchmark Treasury Yield: | 1.521% | 2.015% | 2.062% |
Spread to Treasury: | +47 basis points | +62 basis points | +72 basis points |
Re-offer Yield: | 1.991% | 2.635% | 2.782% |
Coupon: | 1.950% | 2.625% | 2.750% |
Price to Public: | 99.630% | 99.845% | 99.352% |
Optional Redemption: | Prior to July 21, 2031, make-whole call at Treasury rate plus 10 basis points; par call at any time on or after July 21, 2031 | Prior to April 21, 2041, make-whole call at Treasury rate plus 10 basis points; par call at any time on or after April 21, 2041 | Prior to April 21, 2051, make-whole call at Treasury rate plus 15 basis points; par call at any time on or after April 21, 2051 |
Net Proceeds to PepsiCo (Before Expenses): | $1,239,750,000 | $744,150,000 | $984,770,000 |
Use of Proceeds: | PepsiCo intends to use the net proceeds from this offering for general corporate purposes, including the repurchase of outstanding indebtedness and the repayment of commercial paper. | ||
Day Count Fraction: | 30/360 | 30/360 | 30/360 |
CUSIP / ISIN: | 713448FE3 / US713448FE31 | 713448FF0 / US713448FF06 | 713448FG8 / US713448FG88 |
Minimum Denomination: | $2,000 and integral multiples of $1,000 | ||
Joint Book-Running Managers: | BofA Securities, Inc. Citigroup Global Markets Inc. Deutsche Bank Securities Inc. J.P. Morgan Securities LLC |
Senior Co-Managers: | Goldman Sachs & Co. LLC HSBC Securities (USA) Inc. Mizuho Securities USA LLC Morgan Stanley & Co. LLC |
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Co-Managers: | ANZ Securities, Inc. CastleOak Securities, L.P. ING Financial Markets LLC Loop Capital Markets LLC PNC Capital Markets LLC RBC Capital Markets, LLC Siebert Williams Shank & Co., LLC SG Americas Securities, LLC UBS Securities LLC U.S. Bancorp Investments, Inc. |
Address for Notices to the Representatives: | BofA Securities, Inc.
Citigroup Global Markets Inc.
Deutsche Bank Securities Inc.
J.P. Morgan Securities LLC |
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IN WITNESS WHEREOF, the parties hereto have executed this Terms Agreement as of the date first above written.
PEPSICO, INC. | ||
By: | /s/ Hugh F. Johnston | |
Name: Hugh F. Johnston Title: Executive Vice President and Chief Financial Officer | ||
By: | /s/ Ada Cheng | |
Name: Ada Cheng Title: Senior Vice President, Finance and Treasurer |
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CONFIRMED AND ACCEPTED, as of the date first above written:
BOFA SECURITIES, INC.
CITIGROUP GLOBAL MARKETS INC.
DEUTSCHE BANK SECURITIES INC.
J.P. MORGAN SECURITIES LLC
as Representatives of the several Underwriters
By: | BOFA SECURITIES, INC. | ||
By: | /s/ Laurie Campbell | ||
Name: Laurie Campbell | |||
Title: Managing Director |
By: | CITIGROUP GLOBAL MARKETS INC. | ||
By: | /s/ Brian D. Bednarski | ||
Name: Brian D. Bednarski | |||
Title: Managing Director |
By: | DEUTSCHE BANK SECURITIES INC. | ||
By: | /s/ John Han | ||
Name: John Han | |||
Title: Managing Director |
By: | /s/ Ryan E. Montgomery | ||
Name: Ryan E. Montgomery | |||
Title: Managing Director |
By: | J.P. MORGAN SECURITIES LLC | ||
By: | /s/ Robert Bottamedi | ||
Name: Robert Bottamedi | |||
Title: Executive Director |
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Schedule I
Time of Sale Prospectus:
1. | Preliminary Prospectus dated October 6, 2021 (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 October 6, 2021 to be filed by the Company pursuant to Rule 433 under the Securities Act setting forth certain terms of the Underwritten Securities |
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