Item 1.01. Entry into a Material Definitive Agreement.
The information set forth under Item 2.03 of this Current Report on Form 8-K is
incorporated by reference into this Item 1.01.
AutoZone, Inc. ("AutoZone") has other commercial relationships with certain
parties to the New Revolving Credit Agreement described in Item 2.03. From time
to time, several of the lenders or their affiliates furnish various banking,
underwriting and other financial services to AutoZone, for which they receive
customary fees and expenses.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On November 15, 2021, AutoZone entered into a Fourth Amended and Restated Credit
Agreement (the "New Revolving Credit Agreement") by and among AutoZone, as
borrower, the several lenders from time to time party thereto, and Bank of
America, N.A. ("Bank of America"), as administrative agent for the lenders (in
such capacity the "Agent"). The New Revolving Credit Agreement amends that
certain Third Amended and Restated Credit Agreement, dated as of November 18,
2016, among AutoZone, the several lenders from time to time party thereto, and
the Agent, by, among other things, increasing the committed credit amount from
$2.0 billion to $2.25 billion, reducing facility fees and applicable margins,
and extending the termination date, subject to AutoZone's right to request
extension of the termination date as described below.
The New Revolving Credit Agreement will terminate, and all amounts borrowed
under the New Revolving Credit Agreement will be due and payable, on November
15, 2026, but AutoZone may, by notice to the Agent in accordance with the terms
of the New Revolving Credit Agreement, make up to two requests to extend the
termination date for an additional period of one year each. The New Revolving
Credit Agreement includes (i) a $75 million sublimit for swingline loans, (ii) a
$50.0 million individual issuer letter of credit sublimit and (iii) a $250
million aggregate sublimit for all letters of credit.
Revolving borrowings under the New Revolving Credit Agreement may be base rate
loans, Eurodollar loans, or a combination of both, at AutoZone's election. Base
rate loans will bear interest at a base rate plus the "Applicable Margin" (as
defined in the New Revolving Credit Agreement), where the base rate is a
fluctuating rate equal to the highest of (a) the Federal funds rate plus 0.5%,
(b) the interest rate publicly announced from time to time by Bank of America as
its "prime rate," and (c) the London Interbank Offered Rate ("LIBOR") plus 1.0%
(provided in no event will the base rate be less than zero). Eurodollar loans
will bear interest at a rate equal to LIBOR plus the Applicable Margin. Under
the New Revolving Credit Agreement, the Applicable Margin will be between zero
and 20.0 basis points for base rate loans and between 68.0 and 120.0 basis
points for Eurodollar loans, in each case, based on AutoZone's senior unsecured
(non-credit enhanced) long term debt rating as published by Standard & Poor's
Financial Services LLC and/or Moody's Investors Service, Inc. (the "AutoZone
Unsecured Debt Rating"). In addition, facility fees under the New Revolving
Credit Agreement now vary from 7.0 to 17.5 basis points based on the AutoZone
Unsecured Debt Rating.
The New Revolving Credit Agreement contains affirmative, negative and financial
covenants (each with customary exceptions), which AutoZone believes are
customary for an agreement of this type.
The foregoing description of the terms of the New Revolving Credit Agreement is
only a summary and is qualified in its entirety by the full text of the New
Revolving Credit Agreement, which is filed as Exhibit 10.1 to this Current
Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1* Fourth Amended and Restated Credit Agreement, dated as of November 15,
2021, among AutoZone, Inc., as borrower, the lenders party thereto, and
Bank of America, N.A., as administrative agent.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of
Regulation S-K.
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