Starbucks gets five-year $1.5 billion revolver at Libor plus 56.5 bps

By Wendy Van Sickle

Columbus, Ohio, Nov. 6 – Starbucks Corp. entered into a five-year $1.5 billion unsecured revolving credit agreement Friday, according to an 8-K filed with the Securities and Exchange Commission.

The credit facility has a $150 million sublimit for letters of credit. Starbucks may request up to $750 million for additional commitments from time to time.

Initial interest is Libor plus 56.5 basis points. The margin can range from 56.5 bps to 130 bps, depending on the better of Starbucks’ long-term credit ratings and its fixed charge coverage ratio.

The facility fee ranges from 6 bps to 20 bps.

Bank of America Merrill Lynch, Wells Fargo Securities, LLC and Citigroup Global Markets Inc. acted as joint lead arrangers and joint book managers; Bank of America, NA as administrative agent; Wells Fargo Bank, NA and Citibank, NA as co-syndication agents; and Goldman Sachs Bank USA, JPMorgan Chase Bank, NA, the Bank of Nova Scotia, U.S. Bank NA and Morgan Stanley MUFG Loan Partners, LLC as co-documentation agents.

The agreement contains provisions requires the company to maintain a minimum fixed-charge coverage ratio of 2.5 times.

The agreement expires Nov. 6, 2020.

Proceeds are to be used for general corporate purposes, including but not limited to working capital, capital expenditures, acquisitions and share repurchases.

In connection with the new revolver, Starbucks terminated its credit agreement dated Feb. 5, 2013 with Bank of America, NA, as administrative agent.

Starbucks is a Seattle-based coffee company.

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