Summary
Starbucks Corporation (SBUX) filed an 8-K on October 26, 2018, reporting an amendment and restatement of its $1.0 billion 364-day credit agreement. The primary purpose of this amendment was to extend the term of the agreement for an additional 364-day period, effectively pushing its maturity by one year. While the core structure of the credit facility remains, investors should note the increase in the applicable margin for Eurocurrency Rate Loans to 0.92% and the facility fee to 0.08%. These represent a slight increase in borrowing costs. Importantly, the company's larger $2.0 billion unsecured revolving credit facility, maturing in October 2022, was not affected by this amendment and remains unchanged.
Key Highlights
- 1Starbucks amended and restated its $1.0 billion 364-day credit agreement.
- 2The amendment extends the term of the 364-day credit facility by an additional 364 days.
- 3The applicable margin for Eurocurrency Rate Loans increased to 0.92%.
- 4The facility fee for the 364-day credit agreement increased to 0.08%.
- 5The company's existing $2.0 billion unsecured revolving credit facility remains unchanged.
- 6The $2.0 billion revolving credit facility has a maturity date of October 25, 2022.
Frequently Asked Questions
The main purpose of this filing was to inform investors about the amendment and restatement of Starbucks' $1.0 billion 364-day credit agreement. This amendment extended the term of the agreement by an additional 364 days.
Yes, the cost of borrowing increased slightly. The applicable margin for Eurocurrency Rate Loans was raised to 0.92%, and the facility fee increased to 0.08%.
No, the filing explicitly states that Starbucks' existing $2,000,000,000 unsecured, revolving credit facility remains unchanged. This larger facility has a separate maturity date of October 25, 2022.
The amendment extends the term of the 364-day credit agreement for an additional 364-day period from its original maturity date. Investors would need to refer to the specific terms within the filed Credit Agreement (Exhibit 10.1) for the exact new maturity date, but it effectively adds another year to its availability.