KO
Coca Cola CO
NYSE
8-K: Coca-Cola Announces $3 Billion Debt Offering in US Dollars and Euros
Sentiment:
Debt Offering Announcement
9 August 2024 4:24 PM
Coca-Cola has entered into agreements for a $3 billion debt offering in both US dollars and euros to fund general corporate purposes.
Capital raise
Coca-Cola is raising $3 billion through a debt offering.
The offering is split into a US dollar-denominated offering and a euro-denominated offering.
The US dollar offering includes $750 million of 4.650% notes due 2034, $1.5 billion of 5.200% notes due 2055, and $750 million of 5.400% notes due 2064.
The euro offering includes 500 million of 3.375% notes due 2037 and 500 million of 3.750% notes due 2053.
Summary
- The Coca-Cola Company has announced a public offering of debt securities totaling $3 billion.
- This offering is split into two parts: a US dollar-denominated offering and a euro-denominated offering.
- The US dollar offering includes $750 million of 4.650% notes due 2034, $1.5 billion of 5.200% notes due 2055, and $750 million of 5.400% notes due 2064.
- The 2064 notes are a further issuance of existing notes with the same CUSIP and will trade interchangeably.
- The euro-denominated offering includes 500 million of 3.375% notes due 2037 and 500 million of 3.750% notes due 2053.
- The dollar notes offering is expected to close around August 14, 2024, and the euro notes offering around August 15, 2024.
- The company intends to use the net proceeds for general corporate purposes, including working capital, capital expenditures, acquisitions, and debt repayment, as well as potential payments related to tax litigation and a contingent payment for the acquisition of fairlife, LLC.
Sentiment
Score: 7
Explanation: The sentiment is moderately positive as the company is securing funding for its operations and strategic initiatives. However, the use of funds for tax litigation and contingent payments introduces some uncertainty.
Positives
- The debt offerings provide Coca-Cola with significant capital for general corporate purposes.
- The company has secured funding at various interest rates and maturities, allowing for flexibility in capital management.
- The offerings are expected to close quickly, indicating strong market interest.
- The funds can be used for strategic initiatives such as acquisitions and investments.
Negatives
- The company is taking on additional debt, which could increase its financial leverage.
- The proceeds may be used to cover potential payments related to tax litigation, which is an ongoing risk.
- The company is also using the funds for a final contingent consideration payment for the acquisition of fairlife, LLC, which may indicate a higher than expected final cost.
Risks
- The company faces risks related to the ongoing tax litigation with the United States Internal Revenue Service.
- There is a risk that the company may not be able to use the funds as effectively as planned.
- The company is exposed to interest rate risk, as the cost of debt could increase in the future.
- The company is exposed to market risk, as the value of the debt could fluctuate.
Future Outlook
The company intends to use the net proceeds from the offerings for general corporate purposes, which may include working capital, capital expenditures, acquisitions of or investments in businesses or assets and redemption and repayment of short-term or long-term borrowings, as well as for making any potential payments in connection with the company's ongoing tax litigation with the United States Internal Revenue Service and the company's final contingent consideration payment in 2025 in connection with its acquisition of fairlife, LLC.
Industry Context
This debt offering is consistent with the trend of large corporations taking advantage of favorable market conditions to raise capital for various strategic purposes. The issuance of both dollar and euro-denominated notes allows Coca-Cola to diversify its funding sources and potentially benefit from different interest rate environments.
Comparison to Industry Standards
- The issuance of debt by Coca-Cola is a common practice among large, established companies to fund operations and strategic initiatives.
- The interest rates on the notes are within the typical range for investment-grade corporate debt.
- Comparable companies like PepsiCo and Nestle also frequently issue debt to manage their capital structure.
- The use of proceeds for general corporate purposes, including acquisitions and debt repayment, is standard practice.
- The dual offering in both US dollars and euros is a common strategy for multinational corporations to access a broader investor base.
Stakeholder Impact
- Shareholders may see a potential increase in value if the funds are used effectively for growth and acquisitions.
- Employees may benefit from increased job security and opportunities if the company expands.
- Customers may see improved products and services if the company invests in innovation.
- Creditors will be impacted by the new debt issuance, which could affect the company's credit rating.
- Suppliers may see increased business opportunities if the company expands its operations.
Next Steps
- The dollar notes offering is expected to close on or about August 14, 2024.
- The euro notes offering is expected to close on or about August 15, 2024.
- The company will use the net proceeds for general corporate purposes.
Legal Proceedings
- The company intends to use some of the net proceeds from the offerings for potential payments in connection with the company's ongoing tax litigation with the United States Internal Revenue Service.
Key Dates
- 2022-10-28: The company's shelf registration statement on Form S-3 was filed with the Securities and Exchange Commission.
- 2024-05-13: $900 million aggregate principal amount of the company's 5.400% Notes due 2064 were issued.
- 2024-08-07: The Coca-Cola Company entered into the Dollar Notes Underwriting Agreement.
- 2024-08-08: The Coca-Cola Company entered into the Euro Notes Underwriting Agreement.
- 2024-08-09: Date of the 8-K filing.
- 2024-08-14: Expected closing date for the Dollar Notes Offering.
- 2024-08-15: Expected closing date for the Euro Notes Offering.
Keywords
debt offering, notes, bonds, capital raise, corporate finance, Coca-Cola, underwriting agreement, fixed income, securities
KO
Coca Cola CO
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
26 June 2025 11:33 AM
Current Report
- Operating income decreased by 12% in 2024, indicating a decline in core profitability.
- Net cash provided by operating activities significantly decreased by 41% due to the large IRS tax litigation payment, impacting liquidity.
- The company recorded substantial 'Other Operating Charges' including a $760 million impairment for the BodyArmor trademark and a $3,109 million remeasurement of the fairlife contingent consideration liability, indicating significant one-time or non-recurring negative impacts on profitability.
Delay expected
26 June 2025 11:33 AM
Current Report
- Certain initiatives included in the company's productivity and reinvestment program, primarily designed to further simplify and standardize the organization, have been delayed and will now be completed during 2025.
Worse than expected
1 May 2025 3:38 PM
Quarterly Report
- Net operating revenues decreased by 2% due to foreign currency fluctuations and strategic divestitures.
Delay expected
1 May 2025 3:38 PM
Quarterly Report
- Certain initiatives included in the productivity and reinvestment program, which are primarily designed to further simplify and standardize our organization, have been delayed and will be completed during 2025.
Worse than expected
29 April 2025 6:58 AM
Quarterly Report
- Net revenues declined 2% due to currency headwinds and refranchising, indicating worse performance than expected.
- Free cash flow was negative $5.5 billion due to a large contingent consideration payment, indicating worse performance than expected.
Worse than expected
20 February 2025 3:17 PM
Annual Results
- Operating income decreased by 12% due to higher commodity costs, selling, general and administrative expenses, other operating charges, the impact of refranchising, and unfavorable foreign currency exchange rate impact.
Worse than expected
24 October 2024 11:55 AM
Quarterly Report
- The company's operating income decreased by 23% in Q3 2024 compared to Q3 2023.
- The company's net operating revenues decreased by 1% in Q3 2024 compared to Q3 2023.
- The company recorded a $760 million impairment charge related to the BodyArmor trademark.
Worse than expected
23 October 2024 7:00 AM
Quarterly Report
- The company's net revenue declined by 1%, and operating income decreased by 23%, indicating worse than expected results.
- EPS declined by 7%, which is worse than expected.
- The company's cash flow from operations and free cash flow decreased due to a $6.0 billion payment to the IRS, which is worse than expected.
Capital raise
15 August 2024 4:10 PM
Debt Offering Announcement
- The Coca-Cola Company completed a public offering of 1 billion euros in aggregate principal amount of euro-denominated notes.
- The offering includes 500 million euros of 3.375% notes due in 2037 and 500 million euros of 3.750% notes due in 2053.
Capital raise
14 August 2024 4:14 PM
Debt Offering Announcement
- The Coca-Cola Company completed a public offering of $3 billion in senior notes.
- The offering included $750 million of 4.650% notes due in 2034, $1.5 billion of 5.200% notes due in 2055, and $750 million of 5.400% notes due in 2064.
- The company intends to use the net proceeds for general corporate purposes.
Capital raise
9 August 2024 4:24 PM
Debt Offering Announcement
- Coca-Cola is raising $3 billion through a debt offering.
- The offering is split into a US dollar-denominated offering and a euro-denominated offering.
- The US dollar offering includes $750 million of 4.650% notes due 2034, $1.5 billion of 5.200% notes due 2055, and $750 million of 5.400% notes due 2064.
- The euro offering includes 500 million of 3.375% notes due 2037 and 500 million of 3.750% notes due 2053.
Worse than expected
29 July 2024 3:54 PM
Quarterly Report
- Operating income decreased by 17% for the first six months of 2024, indicating a worse performance compared to the same period last year.
- The company recorded significant other operating charges of $2.943 billion for the first six months of 2024, negatively impacting profitability.
- The potential tax liability of $16 billion due to the ongoing dispute with the IRS is a significant financial risk.
Better than expected
23 July 2024 6:58 AM
Quarterly Report
- The company's organic revenue growth of 15% exceeded expectations.
- The company raised its full-year guidance for organic revenue growth to 9-10% and comparable EPS growth to 5-6%.
Capital raise
14 May 2024 4:08 PM
Debt Offering Announcement
- The Coca-Cola Company completed a public offering of €1 billion in Euro-denominated notes.
- The offering was split into two tranches: €500 million of 3.125% notes due in 2032 and €500 million of 3.500% notes due in 2044.
Capital raise
13 May 2024 4:13 PM
Debt Offering Announcement
- Coca-Cola completed a public offering of $3 billion in aggregate principal amount of U.S. dollar-denominated notes.
- The offering included three tranches with different maturities and interest rates.
- The proceeds will be used for general corporate purposes and potentially for tax litigation payments.
Capital raise
8 May 2024 5:07 PM
Debt Offering Announcement
- The company is raising $3 billion through the issuance of US dollar-denominated notes.
- The company is raising 1 billion through the issuance of Euro-denominated notes.
Worse than expected
2 May 2024 1:52 PM
Quarterly Report
- The company's operating income decreased by 36% due to a $760 million impairment charge related to the BodyArmor trademark and a $765 million charge related to the remeasurement of a contingent consideration liability for fairlife.
Worse than expected
30 April 2024 6:58 AM
Quarterly Report
- The company's reported operating income declined by 36%, significantly worse than expected due to substantial charges related to the fairlife acquisition and the BODYARMOR trademark impairment.
Better than expected
13 February 2024 6:57 AM
Quarterly and Annual Earnings Release
- Organic revenue growth exceeded expectations, demonstrating strong underlying business performance.
- Global unit case volume growth indicates continued demand for Coca-Cola products despite market challenges.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.