Philip Morris International has entered into an agreement for its first financing instrument following the issuance of its August 2021 Business Transformation-Linked Financing Framework. The new revolving credit facility provides for borrowings up to an aggregate principal amount of $2.5 billion and expires on Sept. 29, 2026, unless extended as per the terms of the credit agreement.
“We are pleased with the broad engagement and support of lenders for our first business transformation-linked financing instrument,” said Emmanuel Babeau, chief financial officer at PMI. “This credit facility further reinforces our industry-leading transformation and our commitment to accelerate the end of smoking and to use our strong capabilities to develop products that go beyond nicotine and have a net positive impact on society.”
Consistent with the company’s framework, the facility includes business transformation-linked pricing adjustments based on progress on two of PMI’s most ambitious and strategic business transformation metrics: PMI’s smoke-free/total net revenue percentage and the number of markets where PMI’s smoke-free products are available for sale. The adjustments may result in the reduction or increase in both the interest rate and commitment fee under the credit agreement if PMI achieves, or fails to achieve, certain specified targets.
“Investors, lenders and other stakeholders can play an important role in driving change by encouraging and supporting companies that are committed to transform and improve their impact on society,” said Jennifer Motles, chief sustainability officer, in a statement. “We look forward to continued engagement with our stakeholders in order to further accelerate our smoke-free transformation and set an example for other companies, both inside and outside our industry.”
The facility replaces PMI’s existing $3.5 billion revolving credit facility, which was set to expire on Oct. 1, 2022, and was terminated effective Sept. 29, 2021.