01—Abstract
Summary
Summary of the 8-K filed February 8, 2024. Cited figures are marked; the original filing is the authoritative source.
Starbucks Corporation (SBUX) announced on February 8, 2024, the completion of a public offering of senior unsecured notes totaling $2 billiona.
This offering consists of $1 billionb 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.
02—Key points
Key Highlights
- Completed a $2 billion public offering of senior unsecured notes on February 8, 2024.
- Offering 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.
- The notes are unsecured and rank equally with other senior unsecured debt of Starbucks.
- Notes are effectively subordinated to any debt or liabilities of Starbucks' subsidiaries.
- Includes provisions for redemption at various prices before maturity, with 'make-whole' provisions and par redemption closer to maturity.
- Requires 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.
- The offering was underwritten by a syndicate of prominent investment banks including Goldman Sachs, J.P. Morgan, U.S. Bancorp Investments, and Wells Fargo Securities.
03—Questions
Frequently Asked Questions
What is the total amount Starbucks raised in this offering?
Starbucks raised a total of $2 billion through the public offering of its senior unsecured notes.
What are the interest rates and maturity dates for the new notes?
The offering consists of 4.850% Senior Notes due 2027, 4.900% Senior Notes due 2031, and 5.000% Senior Notes due 2034.
How do these new notes rank in Starbucks' capital structure?
These notes are Starbucks' senior unsecured obligations, ranking equally with its other senior unsecured indebtedness. However, they are effectively subordinated to any existing or future indebtedness or liabilities of Starbucks' subsidiaries.
What happens if there is a change of control at Starbucks?
Upon the occurrence of a change of control triggering event (which includes a change of control and a downgrade to below investment grade by Moody's and S&P), Starbucks is required to make an offer to repurchase the affected series of notes at 101% of their principal amount, plus accrued and unpaid interest.
04—Continue