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Debt
12 Months Ended
Sep. 29, 2013
Debt Disclosure [Abstract]  
Debt
Debt

Revolving Credit Facility and Commercial Paper Program
Our previous $500 million unsecured, revolving credit facility (the “2010 credit facility”) was set to mature in November 2014. In the second quarter of fiscal 2013, we replaced the 2010 credit facility with a new $750 million unsecured, revolving credit facility (the “2013 credit facility”) with various banks, of which $150 million may be used for issuances of letters of credit.
The 2013 credit facility is available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases, and is currently set to mature in February 2018. Starbucks has the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $750 million. Borrowings under the 2013 credit facility will bear interest at a variable rate based on LIBOR, and, for US dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 2013 credit facility), in each case plus an applicable margin. The applicable margin is based on the better of (i) the Company's long-term credit ratings assigned by Moody's and Standard & Poor's rating agencies, and (ii) the Company's fixed charge coverage ratio, pursuant to a pricing grid set forth in the 2013 credit facility. The current applicable margin is 0.795% for Eurocurrency Rate Loans and 0.00% for Base Rate Loans. The 2013 credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As a result of the arbitrator’s ruling on the Kraft litigation, the credit facility was amended on November 15, 2013 to exclude the impact of the litigation charge, including the impact on our fixed charge coverage ratio. As of September 29, 2013, we were in compliance with each of these covenants, as amended.
Under our commercial paper program, as approved by our board of directors, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1 billion, with individual maturities that may vary, but not exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are to be backstopped by available commitments under our credit facility. Currently, we may issue up to $729 million under our commercial paper program (the $750 million committed credit facility amount, less $21 million in outstanding letters of credit).
The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures and other corporate purposes, including acquisitions and share repurchases. During fiscal 2013 and fiscal 2012, there were no borrowings under the credit facility or commercial paper programs. As of September 29, 2013 and September 30, 2012, a total of $21 million and $18 million, respectively, in letters of credit were outstanding under the revolving credit facility.

Long-term Debt
In September 2013, we issued $750 million of 10-year 3.85% Senior Notes ("the 2013 notes") due October 2023, in an underwritten registered public offering. Interest on the 2013 notes is payable semi-annually on April 1 and October 1 of each year, commencing April 1, 2014. As discussed in Note 3, we entered into forward-starting interest rate swap agreements related to this debt issuance that effectively locked in the benchmark interest rate, resulting in an effective borrowing cost of 2.86%. As of September 29, 2013, the carrying value of the 2013 notes, recorded on the consolidated balance sheets, was $749.8 million.
In August 2007, we issued $550 million of 6.25% Senior Notes (“the 2007 notes”) due in August 2017, in an underwritten registered public offering. Interest on the 2007 notes is payable semi-annually on February 15 and August 15 of each year. As of September 29, 2013 and September 30, 2012, the carrying value of the 2007 notes, recorded on the consolidated balance sheets, was $549.7 million and $549.6 million, respectively.
The indentures under which the 2013 notes and the 2007 notes were issued also require us to maintain compliance with certain covenants, including limits on future liens and sale and leaseback transactions on certain material properties. As of September 29, 2013 and September 30, 2012, we were in compliance with each of these covenants.

Interest Expense
Interest expense, net of interest capitalized, was $28.1 million, $32.7 million, and $33.3 million in fiscal 2013, 2012 and 2011, respectively. In fiscal 2013, 2012, and 2011, $10.4 million, $3.2 million, and $4.4 million, respectively, of interest was capitalized for asset construction projects.