01—Abstract
Summary
Summary of the 8-K filed May 8, 2025. Cited figures are marked; the original filing is the authoritative source.
Starbucks Corporation (SBUX) has announced the completion of a public offering, raising a total of $1.75 billiona through the issuance of senior unsecured notes.
This offering consists of three tranches: $750 millionb in 4.500% Senior Notes due 2028, $500 million in 4.800% Senior Notes due 2030, and $500 million in 5.400% Senior Notes due 2035. The funds raised will bolster the company's financial flexibility and are likely intended for general corporate purposes, including potential debt refinancing or strategic investments. These notes are senior unsecured obligations of Starbucks and rank equally with other existing senior unsecured indebtedness.
Investors should note that the notes are effectively subordinated to any liabilities of Starbucks' subsidiaries. The company has outlined terms for redemption of these notes, including make-whole provisions and redemption at par under certain conditions, as well as a repurchase obligation in the event of a change of control combined with a credit rating downgrade. This issuance reflects Starbucks' ongoing capital management strategy and its ability to access public debt markets.
02—Key points
Key Highlights
- Starbucks completed a public offering of $1.75 billion in senior unsecured notes.
- The offering includes $750 million of 4.500% Senior Notes due 2028.
- The offering includes $500 million of 4.800% Senior Notes due 2030.
- The offering includes $500 million of 5.400% Senior Notes due 2035.
- The notes are senior unsecured obligations, ranking equally with other senior unsecured debt.
- The notes are effectively subordinated to liabilities of Starbucks' subsidiaries.
- The company has outlined specific redemption terms and a change of control repurchase provision.
03—Questions
Frequently Asked Questions
What is the total amount of debt Starbucks has issued in this offering?
Starbucks has issued a total of $1.75 billion in senior unsecured notes across three different maturities.
What are the interest rates and maturity dates for the new notes?
The new notes carry the following terms: $750 million at 4.500% due May 15, 2028; $500 million at 4.800% due May 15, 2030; and $500 million at 5.400% due May 15, 2035.
How will these new notes rank in Starbucks' capital structure?
These notes are Starbucks' senior unsecured obligations and will rank equally with its other senior unsecured indebtedness. However, they are effectively subordinated to any existing or future indebtedness or liabilities of the company's subsidiaries.
What are the conditions that would trigger a repurchase of these notes by Starbucks?
Starbucks will be required to offer to repurchase the notes at 101% of their principal amount (plus accrued interest) if a change of control triggering event occurs, which involves both a change of control and a below investment grade rating of the applicable note series by Moody's and S&P.
04—Continue