Starbucks Corp. sold $1 billion of bonds to help finance its plan to pay out more money to shareholders.
The world's biggest coffee chain offered bonds in two parts, according to a person with knowledge of the matter. The longest portion of the offering, a 30-year security, yields 97 basis points more than Treasuries, down from initial talk of between 1.20 percentage points and 1.25 percentage points, said the person, who asked not to be identified as the deal is private.
Proceeds will be used for cash dividends, share buybacks, possible acquisitions and other company needs, according to a filing Monday. Earlier this month Starbucks said it plans to return $15 billion to stockholders through a combination of dividends and equity repurchases over a three-year period starting next year. It also said it was boosting its quarterly dividend to 30 cents a share from 20 cents.
The company's capital return plan spurred Moody's Investors Service to downgrade Starbucks' unsecured ratings one notch to A3, four steps above junk. Fitch Ratings also downgraded Starbucks to an equivalent A-, citing the same reasons, according to a Nov. 3 report. Fitch estimates that total debt could increase by as much as $6 billion to fund the program.
Starbucks had nearly $4 billion of long-term debt outstanding as of Oct. 1, according to a regulatory filing. It last sold bonds in March, in a transaction denominated in Japanese yen.
Citigroup, Goldman Sachs and U.S. Bancorp managed the bond sale, according to the Monday filing.
From: Bloomberg News
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
