Moody’s gives A2 to Starbucks notes

Moody's Investors Service said it assigned an A2 rating to Starbucks Corp.’s proposed $500 million senior unsecured note offering.

Starbucks’ ratings also include its A2 senior unsecured rating and Prime-1 short-term commercial paper rating.

The outlook is stable.

"The rating assignment reflects Starbucks solid credit metric and liquidity as well as Moody's view that the company's measured growth strategy, product pipeline, digital initiatives and balanced financial policy will continue to drive strong operating earnings, credit metrics, and liquidity and greater scale over time," Moody's senior credit officer Bill Fahy said in a news release.

To date, Starbucks various product offerings and digital initiatives have driven strong operating metrics and earnings which. As of the LTM period ending Sept. 27, 2015, and pro forma for the proposed $500 million note offering leverage will be about 1.7 times, interest coverage of around 12 times and retained cash flow to debt of about 36%.

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