Keurig Dr Pepper plans $2 billion stock offering to cut debt

The Frisco, Texas-based company said it intends to give underwriters a 30-day option to buy up to an additional $300 million in shares at the same price per share. The offering remains subject to market and other customary conditions.

Keurig Dr Pepper said the debt reduction is intended to strengthen the investment-grade ratings profile of both planned businesses—Beverage Co. and Global Coffee Co.—and give each additional financial capacity to pursue its strategic priorities. Debt targeted for repayment or repurchase may include borrowings under a delayed draw term loan, commercial paper notes and senior unsecured notes.

Goldman Sachs & Co. LLC and Morgan Stanley are joint book-running managers. The shares are being offered through a prospectus supplement and accompanying prospectus under the company’s effective shelf registration statement filed with the U.S. Securities and Exchange Commission. The company said the offering’s completion, timing, size and terms are uncertain and may differ from current expectations.