Starbucks Completes Issuance of Third and Largest Sustainability Bond

The new $1 billion Sustainability Bond will support Starbucks ethical
coffee sourcing and its Greener Retail initiative

A portion of the funds will support a new $20 million equity
investment in responsAbility Investments AG as part of Starbucks Global
Farmer Fund that supports coffee farmers and their communities

SEATTLE–(BUSINESS WIRE)–Starbucks Corporation (NASDAQ: SBUX) today announced that it has
completed issuance of a $1 billion Sustainability Bond. It is the
largest Sustainability Bond the Company has issued to date and follows
two previously issued Sustainability Bonds in 2016 and 2017.

“We are very pleased to see that our new Sustainability Bond attracted
significant investor interest and was oversubscribed,” said Patrick
Grismer, cfo of Starbucks. “The bond demonstrates Starbucks commitment
to meaningful, continual progress toward our aspiration of sustainable
coffee, served sustainably. It also illustrates a trend toward heavier
interest from investors in our socially and environmentally focused
projects – in this case supporting coffee farmers and leading in green

Grismer added that Starbucks leadership in social and environmental
responsibility “is a defining element of who we are as a company. Our
intent is that, by issuing a Sustainability Bond, we’re providing
investors an opportunity to participate in our sustainability efforts,
and our hope is that this inspires others to pursue more
sustainability-related investing opportunities.”

Support for Coffee Farmers

As with the two previously issued Sustainability Bonds, funds will
support ethically sourced coffee. The scope includes purchasing
coffee that is verified by Coffee and Farmer Equity (C.A.F.E.)
; the continued development and operation of Farmer
Support Centers and agronomy research and development centers in
coffee-growing regions around the world; and new and refinanced loans to
coffee farmers made through Starbucks $50 million Global
Farmer Fund

New to the Starbucks Global Farmer Fund and supported by funds from the
bond, Starbucks has partnered with the lending organization,
responsAbility, on a $20 million equity investment to provide financing
to coffee communities in Latin America, Africa and Asia in the form of
loans that can help replace old, less productive trees with new trees,
buy new equipment, and take other actions to improve their coffee crops’
quality and productivity.

“We are excited to have the Starbucks Global Farmer Fund as a
significant investor,” said Anand Chandani, Global Head of Agriculture
Debt Financing at responsAbility. “We see synergies with Starbucks in
building the sustainable coffee value chain, supporting smallholder
farmer engagement and in fostering market linkages.”

Greener Retail

As a new, expanded scope, the bond will also help fund the company’s
Greener Retail commitments, including its Greener Stores initiative, announced
in September
, to design, build and operate 10,000 Greener Stores
globally by 2025. The open-source Starbucks Greener Store
Framework, which Starbucks developed in partnership with World Wildlife
Fund (WWF) and SCS Global Services, focuses on commitments to energy
efficiency, renewable energy, water stewardship, waste reduction and
more. In addition to Greener Stores, funds will also support investments
in greener cups and packaging as Starbucks works to reduce our
environmental footprint with such projects as the global rollout of
strawless lids and identifying the next generation of recyclable and/or
compostable cups.

According to Sustainalytics, which provided a Second-Party
on the bond, Starbucks has aligned its Eligible
Sustainability Projects in the new bond with the priorities outlined in
the U.N. Sustainable Development Goals, established in 2015, as well as
with the 2018 Sustainability Bond Guidelines (SBG).

“We applaud Starbucks efforts to broaden its social and environmental
programs and to align its eligible projects with the U.N. Sustainable
Development Goals,” said Heather Land, executive director of
Sustainalytics’ Sustainable Finance Solutions team. “In addition,
Starbucks inclusion of its Greener Retail initiative is a meaningful
addition to its Sustainability Bond.”

As with any Sustainability Bond and outlined in the Green Bond
Principles, the company must report on how the funds are spent and the
impact they have made against the initiatives. Starbucks will publish
annual updates of the allocation of the proceeds throughout the term of
the sustainability bond until the proceeds have been fully allocated to
projects meeting the eligibility criteria. These updates will be
reported publicly at
and may include additional descriptions of select projects funded with
sustainability bond proceeds and their environmental and/or social

“Morgan Stanley is proud to support Starbucks in their third and largest
Sustainability Bond in three years, and their continued commitment to
the U.N. Sustainable Development Goals,” said Audrey Choi, Chief
Sustainability Officer at Morgan Stanley, which acted as the
Sustainability Structuring Agent and a joint book-running manager on the

“The market capacity to raise $1 billion of earmarked funds directed to
Starbucks existing and new sustainability objectives, including the
design, construction and operation of 10,000 Greener Stores globally by
2025, demonstrates increasing awareness and growth of support of
sustainability objectives amongst the investor community,” added Dolph
Habeck, Head of ESG Debt Syndicate at Morgan Stanley.

The 30-year Sustainability Bond is part of a larger bond offering of $2
billion, with another $1 billion bond issued for general corporate
purposes including the repurchase of common stock as part of the
previously communicated $25 billion shareholder return target. The
issuance is in line with Starbucks commitment to a leverage cap of 3x
lease-adjusted EBITDAR and a minimum credit rating of BBB+Baa1.

For more information on Starbucks priorities related to sustainable
coffee served sustainably, visit this
on Starbucks Stories. For more information on impact to date
from past Sustainability Bonds, visit our website’s environment
and ethical

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically
sourcing and roasting high-quality arabica coffee. Today, with more than
30,000 stores around the globe, Starbucks is the premier roaster and
retailer of specialty coffee in the world. Through our unwavering
commitment to excellence and our guiding principles, we bring the unique
Starbucks Experience to life for every customer through every cup. To
share in the experience, please visit us in our stores or online at

Forward-Looking Statements

Certain statements contained in this release are “forward-looking
statements” within the meaning of applicable securities laws and
regulations, including statements about the expected closing of a public
offering or senior notes and the use of proceeds of such offering. Such
forward-looking statements are based on current management expectations
and satisfactions of certain conditions that are subject to various
risks and uncertainties, including market conditions and those risks
detailed in the Company’s filings with the Securities and Exchange
Commission, including the “Risk Factors” section of the Starbucks Annual
Report on Form 10-K for the fiscal year ended September 30, 2018, and
the prospectus and prospectus supplement delivered in connection with
the public offering of senior notes discussed in this release. The
company assumes no obligation to update any of these forward-looking


Starbucks Coffee Company

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