NEW YORK (AP) -- Moody's Investors Service on Tuesday put Starbucks Corp.'s credit rating on review for an upgrade, based on its plans for a $750 million debt offering.
Starbucks currently has an investment-grade "Baa2" senior unsecured rating from Moody's. A higher credit rating could make it easier for the company to borrow.
Starbucks plans to use proceeds from the offering for general corporate purposes, including dividend payments, stock repurchase plans or potential acquisitions.
Moody's said the money from the proposed debt sale and Starbucks' steady profit growth could help offset risks from a legal dispute with Kraft.
Starbucks in 2010 ended a distribution partnership with Kraft. Kraft had not wanted the partnership to end. The companies went into arbitration and the hearing was completed last year, but the final outcome has not been determined yet. Moody's said that Starbucks claims damages of up to $62.9 million, while Kraft claims damages of up to $2.9 billion plus attorney fees.
Shares of Seattle-based Starbucks increased $1.03, or 1.5 percent, to $71.55 in afternoon trading.
- Professional Services
- credit rating