On February 8, 2024, Starbucks Corporation (“Starbucks” or the “Company”) completed a public offering pursuant to an underwriting agreement (the “Underwriting Agreement”), dated February 5, 2024, with Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein, under which Starbucks agreed to issue and sell to the several underwriters (i) $1,000,000,000 aggregate principal amount of its 4.850% Senior Notes due 2027 (the “2027 Notes”), (ii) $500,000,000 aggregate principal amount of its 4.900% Senior Notes due 2031 (the “2031 Notes”) and (iii) $500,000,000 aggregate principal amount of its 5.000% Senior Notes due 2034 (the “2034 Notes” and, together with the 2027 Notes and the 2031 Notes, the “Notes”).
The Notes were issued under the Indenture, dated as of September 15, 2016 (the “Base Indenture”), by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and as successor in interest to U.S. Bank National Association, as supplemented by the Tenth Supplemental Indenture, dated as of February 8, 2024 (the “Tenth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), by and between the Company and the Trustee.
Starbucks will pay interest on the 2027 Notes semi-annually in arrears on each February 8 and August 8, beginning on August 8, 2024. The 2027 Notes will bear interest at a rate equal to 4.850% per annum. The 2027 Notes will mature on February 8, 2027. At any time prior to January 8, 2027 (one month prior to the maturity date of the 2027 Notes), Starbucks may redeem the 2027 Notes at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the 2027 Notes to be redeemed and (ii) a “make-whole” price described in the Tenth Supplemental Indenture, plus, in either case, accrued and unpaid interest to, but excluding, the redemption date. At any time on and after January 8, 2027, Starbucks may redeem the 2027 Notes at par, plus accrued and unpaid interest to, but excluding, the redemption date.
Starbucks will pay interest on the 2031 Notes semi-annually in arrears on each February 15 and August 15, beginning on August 15, 2024. The 2031 Notes will bear interest at a rate equal to 4.900% per annum. The 2031 Notes will mature on February 15, 2031. At any time prior to December 15, 2030 (two months prior to the maturity date of the 2031 Notes), Starbucks may redeem the 2031 Notes at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the 2031 Notes to be redeemed and (ii) a “make-whole” price described in the Tenth Supplemental Indenture, plus, in either case, accrued and unpaid interest to, but excluding, the redemption date. At any time on and after December 15, 2030, Starbucks may redeem the 2031 Notes at par, plus accrued and unpaid interest to, but excluding, the redemption date.
Starbucks will pay interest on the 2034 Notes semi-annually in arrears on each February 15 and August 15, beginning on August 15, 2024. The 2034 Notes will bear interest at a rate equal to 5.000% per annum. The 2034 Notes will mature on February 15, 2034. At any time prior to November 15, 2033 (three months prior to the maturity date of the 2034 Notes), Starbucks may redeem the 2034 Notes at a redemption price equal to the greater of (i) 100% of the aggregate principal amount of the 2034 Notes to be redeemed and (ii) a “make-whole” price described in the Tenth Supplemental Indenture, plus, in either case, accrued and unpaid interest to, but excluding, the redemption date. At any time on and after November 15, 2033, Starbucks may redeem the 2034 Notes at par, plus accrued and unpaid interest to, but excluding, the redemption date.
In addition, upon the occurrence of a change of control triggering event relating to a particular series of the Notes (which involves the occurrence of both a change of control and a below investment grade rating of the applicable series of the Notes by Moody’s and S&P), Starbucks will be required, subject to certain exceptions, to make an offer to repurchase such series of Notes at a price equal to 101% of the principal amount of such series of Notes, plus accrued and unpaid interest to, but excluding, the purchase date.
The Notes will be the Company’s senior unsecured obligations and will rank equally in right of payment with all of the Company’s other senior unsecured indebtedness, whether currently existing or incurred in the future. The Notes will be effectively subordinated to any existing or future indebtedness or other liabilities, including trade payables, of any of the Company’s subsidiaries. The Notes are subject to customary covenants and events of default, as set forth in the Indenture.
