) has recently priced a public offering of senior notes worth
$750.0 million. The notes will carry an interest rate of 3.85%
and are set to mature in 2023.
Starbucks intends to use the proceeds for business expansion,
dividend payment, share repurchase or financing acquisitions.
Starbucks filed for the registration with the Securities and
Exchange Commission on Sep 3, 2013. J.P. Morgan Securities LLC (a
J.P. Morgan Chase & Co.
) and BofA Merrill Lynch are acting as administrative agents for
the purpose, along with certain other lenders.
Apart from the recent offering, SBUX issued $550 million of
6.25% senior notes n Aug 2007, which are due in Aug 2017. The
company pays interest semi annually on Feb 15 and Aug 15 every
Although the recent offering will enhance the financial
flexibility of the company, it will also increase the debt and
interest expense. However, as Starbucks has a good repayment
structure, the new offering will not be a concern. Interest
offering remained almost stable at $32.7 million from fiscal 2010
to fiscal 2012.
As of Jun 30, 2013, Starbucks held $1.4 billion of cash and
cash equivalents and $2.4 billion of long-term debt.
Meanwhile, Starbucks continues to enhance its product
portfolio and restarts serving its iconic Pumpkin Spice Latte
marking the beginning of the pumpkin season from Sep 2013. This
is the 10
anniversary of the popular drink and is the most popular seasonal
beverage of SBUX.
Pumpkin Latte is growing popular; SBUX's peer
Green Mountain Coffee Roasters Inc.
) has come up with spicy pumpkin lattes that can be brewed in
In its recently concluded third quarter of fiscal 2013,
Starbucks beat the Zacks Consensus Estimate for both revenues and
earnings. Both the metrics also grew year over year. Robust
increase in global traffic, increasing popularity of its
Starbucks loyalty cards, efficiency improvements and cost
controls and lower coffee costs boosted profits.
Moreover, the coffee giant upped its fourth quarter and fiscal
2013 guidance on the back of higher comps, lower commodity costs
and operating leverage. Starbucks carries a Zacks Rank #3
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