Debt

Revolving Credit Facility and Commercial Paper Program

Our $1.5 billion unsecured, revolving credit facility with various banks, of which $150 million may be used for issuances of letters of credit, is available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases, and is currently set to mature on November 6, 2020. 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 credit facility will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 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 credit agreement. The current applicable margin is 0.565% for Eurocurrency Rate Loans and 0.00% (nil) for Base Rate Loans. The 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 of October 1, 2017, we were in compliance with all applicable covenants. No amounts were outstanding under our credit facility as of October 1, 2017.

Under our commercial paper program, 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 required to be backstopped by available commitments under our credit facility discussed above. The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock and share repurchases. As of October 1, 2017, availability under our commercial paper program was approximately $0 billion (which represents the full committed credit facility amount, as no amounts were outstanding under our commercial paper program).

In the first quarter of fiscal 2018 we entered into a new credit facility and commercial paper program. See Note 18, Subsequent Events for further detail.

Long-term Debt

In March 2017, we issued Japanese yen-denominated long-term debt in an underwritten registered public offering. The 7-year 0.372% Senior Notes (the “2024 notes”) due March 2024 were issued with a face value of ¥85 billion, of which ¥81 billion has been designated to hedge the foreign currency exposure of our net investment in Japan. Interest on the 2024 notes is payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2017.

In December 2016, we repaid the $400 million of 0.875% Senior Notes (the “2016 notes”) at maturity.

In May 2016, we issued long-term debt in an underwritten registered public offering, which consisted of $500 million of 10-year 2.450% Senior Notes (the “2026 notes”) due June 2026. Interest on the 2026 notes is payable semi-annually on June 15 and December 15 of each year, commencing on December 15, 2016.

In February 2016, we issued long-term debt in an underwritten registered public offering, which consisted of $500 million of 5-year 2.100% Senior Notes (the “2021 notes”) due February 2021. In May 2016, we reopened this offering with the same terms and issued an additional $250 million of Senior Notes (collectively, the “2021 notes”) for an aggregate amount outstanding of $750 million. Interest on the 2021 notes is payable semi-annually on February 4 and August 4 of each year, commencing on August 4, 2016.

In July 2015, we redeemed $550 million of 6.250% Senior Notes (the “2017 notes”) originally scheduled to mature in August 2017. The redemption resulted in a charge of $61.1 million, which is presented separately as loss on extinguishment of debt within other income and expenses on our consolidated statements of earnings. This loss primarily relates to the optional redemption payment as outlined in the 2017 notes indenture, as well as non-cash expenses related to the previously capitalized original issuance costs and accelerated amortization of the unamortized discount. In connection with the redemption, we also reclassified $2.0 million from accumulated other comprehensive income to interest expense on our consolidated statements of earnings related to remaining unrecognized losses from interest rate contracts entered into in conjunction with the 2017 notes and designated as cash flow hedges.

In June 2015, we issued long-term debt in an underwritten registered public offering, which consisted of $500 million of 7-year 2.700% Senior Notes (the “2022 notes”) due June 2022, and $350 million of 30-year 4.300% Senior Notes (the “2045 notes”) due June 2045. Interest on the 2022 and 2045 notes is payable semi-annually on June 15 and December 15 of each year, commencing on December 15, 2015.

Components of long-term debt including the associated interest rates and related fair values by calendar maturity (in millions, except interest rates):



	Oct 1, 2017					Oct 2, 2016					Stated Interest Rate		Effective Interest Rate ⁽¹⁾
Issuance	Face Value			Estimated Fair Value		Face Value			Estimated Fair Value		Stated Interest Rate		Effective Interest Rate ⁽¹⁾
2016 notes	$	—		$	—	$	400.0		$	400	0.875	%	0.941	%
2018 notes	350.0			352		350.0			357		2.000	%	2.012	%
2021 notes	500.0			501		500.0			511		2.100	%	2.293	%
2021 notes	250.0			250		250.0			255		2.100	%	1.600	%
2022 notes	500.0			508		500.0			526		2.700	%	2.819	%
2023 notes	750.0			806		750.0			839		3.850	%	2.859	%
2024 notes⁽²⁾	755.3			760		—			—		0.372	%	0.462	%
2026 notes	500.0			481		500.0			509		2.450	%	2.511	%
2045 notes	350.0			381		350.0			417		4.300	%	4.348	%
Total	3,955.3			4,039		3,600.0			3,814
Aggregate debt issuance costs and unamortized premium/(discount), net	(17.5		)			(14.8		)
Hedge accounting fair value adjustment⁽³⁾	(5.2		)			—
Total	$	3,932.6				$	3,585.2


⁽¹⁾	Includes the effects of the amortization of any premium or discount and any gain or loss upon settlement of related treasury locks or forward-starting interest rate swaps utilized to hedge the interest rate risk prior to the debt issuance.

⁽²⁾ Japanese yen-denominated long-term debt.

⁽³⁾ Amount represents the change in fair value due to changes in benchmark interest rates related to our 2023 notes. Refer to Note 3, Derivative Financial Instruments, for additional information on our interest rate swap designated as a fair value hedge.

The indentures under which the above 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 October 2, 2017, we were in compliance with each of these covenants.

The following table summarizes our long-term debt maturities as of October 1, 2017 by fiscal year (in millions):



Fiscal Year	Total
2018	$	—
2019	350.0
2020	—
2021	750.0
2022	500.0
Thereafter	2,355.3
Total	$	3,955.3