Starbucks received a credit rating downgrade from Fitch Ratings to BBB (the second lowest investment-grade rating) from BBB+. Fitch also mentioned a negative outlook on the coffee chain, which implies a potential further downgrade.
The downgrade followed Starbucks’ proposal for $3 billion of unsecured notes, which creates a “higher leverage profile” for Starbucks according to Fitch.
Fitch also mentioned that Starbucks’ fiscal second quarter earnings came in worse than expected amid the coronavirus pandemic.