--- title: Keurig Dr Pepper Sells $2 Billion of Stock to Cut Debt Before Its Coffee Spin-Off description: Keurig Dr Pepper priced $2 billion of new shares at $34.50 to repay debt and cut leverage to 3.8 times before it splits in early 2027. author: Darie Nani (Editor-in-Chief) date: 2026-11-13T21:14:41.673Z updated: 2026-11-13T21:14:41.695Z canonical: https://www.sovereignmagazine.com/article/keurig-dr-pepper-2-billion-stock-sale-debt-split image: https://cdn.nanimediahouse.com/keurig-dr-pepper-canning-line-578360.webp categories: Markets content_type: News region: United States publication: Sovereign Magazine schema_type: Article about: - type: Organization name: Keurig Dr Pepper description: Nasdaq-listed North American beverage and coffee company behind Dr Pepper, Canada Dry and the Keurig single-serve brewing system, which acquired JDE Peet's in 2026. url: https://www.keurigdrpepper.com/ --- Keurig Dr Pepper priced about $2 billion of new shares on Thursday at $34.50 each and will use the money to pay down debt, which rose with its takeover of JDE Peet's, before it splits into two listed companies, Beverage Co. and Global Coffee Co., in early 2027. The price is 9.8% below Wednesday's close of $38.25, before the sale was announced, and about 2.6% below Thursday's close of $35.42. Keurig Dr Pepper stock fell about 7.4% on Thursday, the day the sale was launched and priced. Nasdaq trading data show 37.2 million shares changed hands, roughly three times Wednesday's volume. The shares had dropped to $34.74 on Nov. 3, from $36.82, when KDP reported third-quarter results, and had climbed back to $38.25 by Wednesday. The base sale is 57,971,015 shares, run by Goldman Sachs and Morgan Stanley. The banks have 30 days to buy up to 8,695,652 more at the same price, worth up to $300 million, which KDP would also use to repay debt. The sale is due to close on Monday, Nov. 16. ## Net Debt Falls to 3.8 Times EBITDA After the Sale, From 4.1 Times KDP had $29.2 billion of debt principal at Sept. 30 and $1.3 billion of cash, according to a prospectus supplement it filed with the SEC on Thursday. Against pro forma adjusted EBITDA of $6.8 billion for the 12 months to that date, its net debt of $27.9 billion came to 4.1 times that figure. Repaying $2 billion takes net debt to $25.9 billion and the ratio to 3.8 times. KDP says that should leave both Beverage Co. and Global Coffee Co. lower within the leverage ranges it set for them at the separation. Those ranges, set at an investor day in October 2025, are about 3.5 to 4.0 times for Beverage Co. and 3.75 to 4.25 times for Global Coffee Co. KDP projected then that leverage would be 4.6 times when the JDE Peet's deal closed. In February 2026 it lowered that projection to 4.5 times, when it enlarged a convertible preferred investment in Beverage Co., led by Apollo and KKR, to $4.5 billion from $3 billion. Both times it said it was also looking at sales of non-core assets to bring debt down faster. ## The Term Loan That Funded the JDE Peet's Deal Comes Due in 2027 KDP has not decided how to divide the $2 billion among its term loan, its commercial paper and its senior unsecured notes. The delayed draw term loan, with $3.2 billion outstanding at Sept. 30, was drawn "to fund a portion of the JDE Peet's Acquisition," cost a weighted average of about 3.58% in the third quarter and comes due between March 29 and June 30, 2027. KDP also had about $1.2 billion of commercial paper and $24.8 billion of senior notes, the earliest of them due on Nov. 15. Under its February financing plan, Global Coffee Co. would issue junior subordinated notes after the split to repay whatever remains of the term loan. Affiliates of some of the underwriters are lenders under the term loan, and Morgan Stanley Senior Funding, a Morgan Stanley affiliate, is its administrative agent. Because those affiliates may receive at least 5% of the net proceeds, the prospectus lists them under conflicts of interest and the sale is run under FINRA Rule 5121. ## The New Shares Add About 4.3% to KDP's Share Count KDP had 1,360,948,350 shares outstanding on Nov. 5, so the base sale adds about 4.3%, or about 4.9% if the banks take the full option. That count leaves out a further 120,805,369 shares issuable on conversion of KDP's Series A convertible perpetual preferred stock, and the prospectus lists "dilution from the conversion of such preferred stock" among its risks. KDP and its executive officers and directors agreed not to sell shares for 60 days. ## KDP Reported a 70.6% Rise in Third-Quarter Sales on Nov. 3 Net sales rose 70.6% to $7.3 billion in the quarter with JDE Peet's included, or 8.6% without it, and adjusted earnings per share rose 22.2% to $0.66. KDP reaffirmed its 2026 guidance, which assumes 3% to 5% constant-currency earnings growth for the legacy business, a range it attributed to "revised expectations for U.S. Coffee." ## KDP Ties the Timing of the Split to Leverage at Each Company KDP said in February that the separation's timing "will be based on the achievement of key milestones, including appropriate leverage levels at each company, and supportive market conditions." It now describes its preparations as "well advanced" and expects the spin-off, which it intends to be tax-free to US shareholders, in early 2027, "subject to market and other conditions." Chief executive Tim Cofer said with the third-quarter results that the company remains focused on "achieving the remaining milestones to enable our planned separation." More on Keurig Dr Pepper is at [keurigdrpepper.com](https://www.keurigdrpepper.com/). ## FAQ **Q: Who did Keurig Dr Pepper just buy?** Keurig Dr Pepper bought substantially all of JDE Peet's on April 1, 2026, and the remaining shares in October. JDE Peet's is the coffee and tea company behind Jacobs, L'OR and Peet's, sells in more than 100 markets and is now called JDEP Coffee B.V. KDP's February financing plan had Global Coffee Co. assuming about $5 billion of existing JDE Peet's bonds. **Q: Why is Keurig Dr Pepper selling shares instead of paying down debt from cash flow?** The sale raises in one transaction about twice the $1.01 billion of free cash flow KDP generated in the third quarter. The $3.2 billion term loan from the JDE Peet's deal falls due by June 2027, around the planned split, and KDP has said the split's timing depends on reaching appropriate leverage at each company.