| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under anOff-Balance Sheet Arrangement of a Registrant. |
On August 10, 2018, Starbucks Corporation (“Starbucks” or the “Company”) completed a public offering pursuant to an underwriting agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, as representatives of the several underwriters named therein, under which Starbucks agreed to issue and sell to the several underwriters (i) $1,250,000,000 aggregate principal amount of its 3.800% Senior Notes due 2025 (the “2025 Notes”), (ii) $750,000,000 aggregate principal amount of its 4.000% Senior Notes due 2028 (the “2028 Notes”) and (iii) $1,000,000,000 aggregate principal amount of its 4.500% Senior Notes due 2048 (the “2048 Notes” and, together with the 2025 Notes and the 2028 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 Fourth Supplemental Indenture, dated as of August 10, 2018 (the “Fourth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), by and between the Company and the Trustee.
Starbucks will pay interest on the 2025 Notes on each February 15 and August 15, beginning on February 15, 2019. The 2025 Notes will mature on August 15, 2025. At any time prior to June 15, 2025 (two months prior to the maturity date of the 2025 Notes), Starbucks may redeem the 2025 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 15, 2025, Starbucks may redeem the 2025 Notes at par, plus accrued and unpaid interest.
Starbucks will pay interest on the 2028 Notes on each May 15 and November 15, beginning on November 15, 2018. The 2028 Notes will mature on November 15, 2028. At any time prior to August 15, 2028 (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 August 15, 2028, Starbucks may redeem the 2028 Notes at par, plus accrued and unpaid interest.
Starbucks will pay interest on the 2048 Notes on each May 15 and November 15, beginning on November 15, 2018. The 2048 Notes will mature on November 15, 2048. At any time prior to May 15, 2048 (six months prior to the maturity date of the 2048 Notes), Starbucks may redeem the 2048 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 May 15, 2048, Starbucks may redeem the 2048 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 Moody’s 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 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.
The foregoing disclosure is qualified in its entirety by reference to the Base Indenture and the Fourth Supplemental Indenture. The Base Indenture was filed as Exhibit 4.1 to the Company’s Registration Statement on FormS-3 (SEC RegistrationNo. 333-213645) (the “Registration Statement”) and is incorporated herein by reference. The Fourth Supplemental Indenture is attached hereto as Exhibit 4.2 and incorporated herein by reference.
