On November 22, 2017, Starbucks Corporation (
Starbucks
or the
Company
) completed a public offering pursuant to an underwriting agreement (the
Underwriting Agreement
) with Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and U.S. Bancorp Investments, Inc., as
representatives of the several underwriters named therein, under which Starbucks agreed to issue and sell to the several underwriters (i) $500,000,000 aggregate principal amount of its 2.200% Senior Notes due 2020 (the
2020 Notes
)
and (ii) $500,000,000 aggregate principal amount of its 3.750% Senior Notes due 2047 (the
2047 Notes
and, together with the 2020 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 Second Supplemental Indenture, dated as of November 22, 2017 (the
Second Supplemental Indenture
and, together with the Base
Indenture, the
Indenture
), by and between the Company and the Trustee.
Starbucks will pay interest on the 2020 Notes on each
May 22 and November 22, beginning on May 22, 2018. The 2020 Notes will mature on November 22, 2020. At any time, Starbucks may redeem the 2020 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.
Starbucks will pay interest on the 2047 Notes on each
June 1 and December 1, beginning on June 1, 2018. The 2047 Notes will mature on December 1, 2047. At any time prior to June 1, 2047 (six months prior to the maturity date of the 2047 Notes), Starbucks may redeem the 2047
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 June 1, 2047, Starbucks may redeem
the 2047 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 Second 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 Second 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.