8-KFinancial EventsOther EventsExhibits & Filings

STARBUCKS CORP 8-K Report, Financial Obligation (Feb 4, 2016)

Filed February 4, 2016For Securities:SBUX

Summary

Starbucks Corporation (SBUX) filed an 8-K on February 4, 2016, to report the completion of a public offering of $500 million in aggregate principal amount of 2.100% Senior Notes due February 4, 2021. These notes are unsecured and rank equally with other senior unsecured debt, but are effectively subordinated to any subsidiary indebtedness. The offering was conducted under an underwriting agreement with several major financial institutions. The notes will mature in five years and carry an annual interest rate of 2.100%, with interest payments made semi-annually. Starbucks has the option to redeem the notes prior to maturity, subject to a "make-whole" premium, and at par value on or after January 4, 2021. Additionally, a "change of control triggering event" would require Starbucks to offer to repurchase the notes at 101% of their principal amount.

Key Highlights

  • 1Starbucks successfully issued $500 million in 2.100% Senior Notes due February 4, 2021.
  • 2The offering was completed on February 4, 2016.
  • 3The notes are senior unsecured obligations of Starbucks.
  • 4Interest payments are scheduled semi-annually, starting August 4, 2016.
  • 5Starbucks can redeem the notes before maturity, with a 'make-whole' premium or at par after January 4, 2021.
  • 6A change of control event could trigger a mandatory repurchase offer at 101% of principal.

Frequently Asked Questions

This 8-K filing by Starbucks Corporation serves to report the completion of a public offering of $500 million of its 2.100% Senior Notes due February 4, 2021. It details the terms of the notes, the underwriters involved, and related agreements.

The notes carry a 2.100% annual interest rate, mature on February 4, 2021, and will have semi-annual interest payments beginning August 4, 2016. They are senior unsecured obligations of Starbucks.

Starbucks can redeem the notes at any time before January 4, 2021, at a price including a 'make-whole' premium. After January 4, 2021, the company can redeem them at par value, plus accrued interest. Also, a change of control triggering event would require Starbucks to offer to repurchase the notes at 101% of the principal amount.

The notes are Starbucks' senior unsecured obligations and rank equally with its other senior unsecured indebtedness. However, they are effectively subordinated to any existing or future debt or liabilities of Starbucks' subsidiaries.