On February 28, 2018, Starbucks Corporation (
Starbucks
or the
Company
) completed a public offering pursuant to an underwriting agreement (the
Underwriting Agreement
) with J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. LLC 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
3.100% Senior Notes due 2023 (the
2023 Notes
) and (ii) $600,000,000 aggregate principal amount of its 3.500% Senior Notes due 2028 (the
2028 Notes
and, together with the 2023 Notes, the
Notes
).
The Notes are being issued under the Indenture, dated as of September 15, 2016 (the
Base Indenture
),
by and between the Company and U.S. Bank National Association, as trustee (the
Trustee
), as supplemented by the Third Supplemental Indenture, dated as of February 28, 2018 (the
Third Supplemental Indenture
and, together with the Base Indenture, the
Indenture
), by and between the Company and the Trustee.
Starbucks will pay interest on the
2023 Notes on each March 1 and September 1, beginning on September 1, 2018. The 2023 Notes will mature on March 1, 2023. At any time prior to February 1, 2023 (one month prior to the maturity date of the 2023 Notes),
Starbucks may redeem the 2023 Notes at a redemption price equal to 100% of the principal amount of such series, plus a make whole premium as described in the Indenture and accrued and unpaid interest. At any time on and after
February 1, 2023, Starbucks may redeem the 2023 Notes at par, plus accrued and unpaid interest.
Starbucks will pay interest on the 2028 Notes on
each March 1 and September 1, beginning on September 1, 2018. The 2028 Notes will mature on March 1, 2028. At any time prior to December 1, 2027 (three months prior to the maturity date of the 2028 Notes), Starbucks may
redeem the 2028 Notes at a redemption price equal to 100% of the principal amount of such series, plus a make whole premium as described in the Indenture and accrued and unpaid interest. At any time on and after December 1, 2027,
Starbucks may redeem the 2028 Notes at par, plus accrued and unpaid interest.
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 Moodys and S&P), Starbucks will be required to make an
offer to repurchase such series of the Notes at a price equal to 101% of the principal amount of such series of the Notes, plus accrued and unpaid interest.
The Notes will be the Companys senior unsecured obligations and will rank equally in right of payment with all of the Companys 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 Companys
subsidiaries. The Notes are subject to customary covenants and events of default, as set forth in the Indenture.
The foregoing disclosure is qualified in
its entirety by reference to the Base Indenture and the Third Supplemental Indenture. The Base Indenture was filed as Exhibit 4.1 to the Companys Registration Statement on Form
S-3
(SEC Registration
No. 333-213645)
(the
Registration Statement
) and is incorporated herein by reference. The Third Supplemental Indenture is attached hereto as Exhibit 4.2 and incorporated herein by reference.
In addition, in connection with the public offering of the Notes, Starbucks is filing the Underwriting Agreement and certain other items listed below as
exhibits to this Current Report on Form
8-K
for the purpose of incorporating such items into the Registration Statement. Such items filed as exhibits to this Current Report on Form
8-K
are hereby incorporated into the Registration Statement by reference.