8-KMaterial AgreementsExhibits & Filings

STARBUCKS CORP 8-K Report, Material Agreement (Jan 23, 2015)

Filed January 23, 2015For Securities:SBUX

Summary

Starbucks Corporation (SBUX) filed an 8-K on January 22, 2015, reporting on an amendment to its existing Credit Agreement, effective January 21, 2015. The most significant change is the extension of the credit facility's maturity date from February 5, 2018, to January 21, 2020. This extension provides Starbucks with greater financial flexibility and a longer-term commitment from its lenders, which is generally viewed positively by investors as it underpins the company's operational and strategic planning. Additionally, the amendment adjusted certain facility fees and borrowing rates, as well as other administrative aspects. The unsecured, revolving credit facility remains at $750 million, with an option to increase commitments up to $1.5 billion. Interest rates continue to be variable, based on LIBOR or a Base Rate plus an applicable margin, which is tied to the company's credit ratings and fixed charge coverage ratio. The company's CFO, Scott Maw, signed the filing, indicating senior management's engagement with the company's financing arrangements.

Key Highlights

  • 1Starbucks entered into Amendment No. 2 to its Credit Agreement on January 21, 2015.
  • 2The primary amendment extends the maturity date of the $750 million unsecured revolving credit facility from February 5, 2018, to January 21, 2020.
  • 3The amendment adjusted certain facility fee and borrowing rates (Applicable Rate).
  • 4The company retains the option to request an increase in aggregate commitments, potentially doubling the facility size to $1.5 billion.
  • 5Borrowing interest rates remain variable, based on LIBOR or Base Rate plus an applicable margin.
  • 6The applicable margin is determined by a pricing grid based on credit ratings and fixed charge coverage ratio.
  • 7The filing was signed by CFO Scott Maw, indicating senior financial oversight.

Frequently Asked Questions

The main purpose of this 8-K filing is to report an amendment to Starbucks' existing Credit Agreement, specifically extending the maturity date of its credit facility and adjusting associated terms.

Extending the maturity date to January 21, 2020, provides Starbucks with greater financial stability and planning certainty. It ensures continued access to a significant credit line for a longer period, supporting ongoing business operations, strategic investments, and potential future needs without immediate refinancing concerns.

The Credit Agreement continues to provide for a $750 million unsecured, revolving credit facility. However, Starbucks retains the option to request an increase in aggregate commitments from lenders, which could potentially raise the total facility commitment to a maximum of $1.5 billion.

Interest rates are variable and will continue to be based on either the LIBOR or a Base Rate (for U.S. Dollar loans under certain circumstances), plus an applicable margin. This margin is determined by a pricing grid that considers Starbucks' long-term credit ratings from Moody's and Standard & Poor's, as well as its fixed charge coverage ratio.