Summary
Starbucks Corporation (SBUX) announced on February 8, 2024, the completion of a public offering of senior unsecured notes totaling $2 billion. This offering consists of $1 billion in 4.850% Senior Notes due 2027, $500 million in 4.900% Senior Notes due 2031, and $500 million in 5.000% Senior Notes due 2034. The issuance was conducted under an underwriting agreement with several major financial institutions and is governed by an indenture, as supplemented by a Tenth Supplemental Indenture. These notes are unsecured obligations of Starbucks and rank equally with its other senior unsecured indebtedness. They are effectively subordinated to any existing or future indebtedness of Starbucks' subsidiaries. The proceeds from this offering will bolster Starbucks' financial flexibility. Investors should note the specific interest rates, maturity dates, and redemption provisions for each tranche of notes, as well as the potential repurchase obligation in the event of a change of control triggering a downgrade to below investment grade.
Key Highlights
- 1Completed a $2 billion public offering of senior unsecured notes on February 8, 2024.
- 2Offering includes $1 billion of 4.850% Senior Notes due 2027, $500 million of 4.900% Senior Notes due 2031, and $500 million of 5.000% Senior Notes due 2034.
- 3The notes are unsecured and rank equally with other senior unsecured debt of Starbucks.
- 4Notes are effectively subordinated to any debt or liabilities of Starbucks' subsidiaries.
- 5Includes provisions for redemption at various prices before maturity, with 'make-whole' provisions and par redemption closer to maturity.
- 6Requires a repurchase offer at 101% of principal plus accrued interest in the event of a change of control coupled with a below investment grade rating.
- 7The offering was underwritten by a syndicate of prominent investment banks including Goldman Sachs, J.P. Morgan, U.S. Bancorp Investments, and Wells Fargo Securities.