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| AZO > SEC Filings for AZO > Form 8-K on 9-Jul-2009 | All Recent SEC Filings |
9-Jul-2009
Entry into a Material Definitive Agreement
(2) terminated its Second Amended and Restated Five-Year Credit Agreement dated as of May 5, 2006 (the "Five-Year Credit Agreement") among AutoZone, the several Lenders from time to time party thereto, Bank of America as Administrative Agent, Citicorp USA, Inc. ("CUSA") as Syndication Agent; and
(3) terminated its Four-Year Credit Agreement dated as of May 5, 2006 (the "Four-Year Credit Agreement") among AutoZone, the several Lenders from time to time party thereto, Bank of America as Administrative Agent, CUSA as Syndication Agent, and a syndicate of financial institutions (including Bank of America and CUSA) as lenders, arranged by Banc of America Securities LLC and Citigroup Global Markets, Inc. as Joint Lead Arrangers and Joint Book Managers.
The Five-Year Credit Agreement and the Four-Year Credit Agreement are collectively referred to as the "Prior Credit Facilities." The Prior Credit Facilities provided for aggregate credit of up to $1 billion, subject to increase at the election of AutoZone to an amount not to exceed $1.3 billion subject to satisfaction of certain conditions. The principal amount of the
Five-Year Credit Facility was $700 million and the principal amount of the
Four-Year Credit Facility was $300 million. The Prior Credit Facilities provided
for up to $50 million in swingline loans and up to $200 million for letters of
credit. Borrowings under the Prior Credit Facilities bore interest at
fluctuating rates which, at AutoZone's election, were tied to Bank of America's
prime lending rate or a Eurodollar rate. The Prior Credit Facilities were
subject to customary covenants and conditions, including affirmative, negative
and financial covenants. There was no prepayment or other penalty payable upon
termination of the Prior Credit Facilities.
The Revolving Credit Agreement provides for loans in the principal amount of
up to $800 million, which amount may be increased to $1 billion at the election
of AutoZone upon the satisfaction of certain conditions. The Revolving Credit
Agreement terminates by its terms, and all amounts borrowed under the Revolving
Credit Agreement shall be due and payable, on July 15, 2012, but AutoZone may,
on or after July 9, 2011, by notice to the Administrative Agent, request an
extension of the termination date to July 15, 2013, in which event the Lenders
under the Revolving Credit Agreement may, at their individual options, elect to
extend the termination date. The Revolving Credit Agreement includes a
$50 million sublimit for Swingline Loans and a $200 million aggregate sublimit
for letters of credit.
Revolving loans under the Revolving Credit Agreement may be base rate loans,
Eurodollar loans, or a combination of both, at AutoZone's election. Base rate
loans shall bear interest at a rate equal to the sum of (A) the highest of the
Federal Funds Rate plus 1/2 of 1%, the Bank of America prime rate as publicly
announced from time to time (the "Base Rate"), and the Eurodollar Rate plus 1%,
plus (B) the Applicable Margin as defined in the Revolving Credit Agreement.
Eurodollar loans shall bear interest at a rate equal to the Eurodollar Rate as
defined in the Revolving Credit Agreement plus the Applicable Margin. Under the
Revolving Credit Agreement, the Applicable Margin for Eurodollar Loans shall
equal the composite credit default swap spread for the three (3) year point on
AutoZone's "trading convention credit default swap curve," calculated on a
30-day moving average basis, as obtained from time to time by the Administrative
Agent from Markit Group Limited or its successor. The Applicable Margin for Base
Rate Loans shall equal the Applicable Margin for Eurodollar Loans less 1% per
annum (but not less than zero). The Applicable Margin for Eurodollar Loans
(including the Applicable Margin as used to determine the Applicable Margin for
Base Rate Loans prior to subtracting the 1% per annum) shall be subject to a
floor and a ceiling based on AutoZone's senior unsecured (non-credit enhanced)
long term debt rating as published by Standard & Poor's Ratings Service, Moody's
Investors Service, Inc. and/or Fitch, Inc.
Certain revolving credit loans ("Swingline Loans") will be made available by
Bank of America as Swingline Lender on a same-day basis in minimum amounts of
$5 million, up to the $50 million Swingline Loan sublimit. Bank of America has
the discretion to make or not make Swingline Loans. Any Swingline Loan must be
repaid by AutoZone in full upon the earliest of (a) the maturity date of the
Swingline Loan as agreed upon by the Swingline Lender and AutoZone (which shall
be no more than seven (7) business days following the date of the Swingline
advance), (b) the Termination Date of the Revolving Credit Facility (including
any extension), and (c) the demand of the Swingline Lender. Swingline Loans that
are base rate loans shall bear interest at the Base Rate plus the Applicable
Margin. Swingline Loans that are
Quoted Rate Swingline Loans shall bear interest at the fixed percentage rate per
annum offered by the Swingline Lender and accepted by AutoZone with respect to a
particular Swingline Loan.
A portion of the available credit under the Revolving Credit Agreement, but
not to exceed $200 million, will be available for the issuance of letters of
credit. Letters of credit will be issued by SunTrust Bank and Bank of America,
or another lender acceptable to AutoZone and the Administrative Agent.
AutoZone may prepay loans under the Revolving Credit Agreement in whole or in
part at any time without premium or penalty, provided that if prepayment of a
Eurodollar Loan or a Quoted Rate Swingline Loan does not occur on the last day
of an interest period or if AutoZone does not provide proper notice of intent to
prepay (three (3) business days notice in the case of Eurodollar Loans and one
(1) business day notice in the case of Base Rate Loans), then AutoZone will
indemnify the lenders against lost spread due to improper notice or failure to
pay on the last business day of an interest period. If a change of control
occurs, each lender has the right to require AutoZone to prepay such lender's
outstanding portion of loans and cash collateralize such lender's letter of
credit obligations, plus any accrued and unpaid interest to the date of
prepayment. Each lender must determine whether to require such prepayment during
the 20-day period following notice from the Administrative Agent.
The Revolving Credit Agreement contains customary covenants for transactions
of this type. The financial covenants include covenants that AutoZone will not
permit the ratio of its "Consolidated Adjusted Debt" to "Consolidated Adjusted
EBITDAR" to be greater than 3.10 to 1.00 as of the last day of each fiscal
quarter and will maintain a minimum ratio of "Consolidated EBITDAR" to
"Consolidated Interest Expense plus Consolidated Rents" of 2.50 to 1.00. The
Revolving Credit Agreement also contains customary events of default. Upon the
occurrence of an event of default, the outstanding obligations under the
Revolving Credit Agreement may be accelerated and become immediately due and
payable.
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