Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 15, 2021, CarMax, Inc. (the "Company") and CarMax Auto Superstores,
Inc. ("CASI" or the "Borrower") entered into a term loan credit agreement (the
"Credit Agreement") with U.S. Bank National Association, as a lender and as
administrative agent, and the other lenders party thereto.
The Credit Agreement provides for a term loan facility under which the Borrower
has borrowed term loans in an aggregate principal amount of $700,000,000 (the
"Term Loan Facility"). The Term Loan Facility will mature on October 15, 2026.
The proceeds of the Term Loan Facility were used to pay down normal course
borrowings under the Company's $1.45 billion unsecured revolving credit facility
and for other working capital and general corporate purposes. We continue to
target an adjusted debt-to-total capital ratio in a range of 35% to 45%. The
borrowings and other obligations under the Credit Agreement are guaranteed by
the Company and certain of its subsidiaries.
Borrowings under the Term Loan Facility will generally bear interest at a
"Eurodollar Reference Rate", plus an applicable margin. The Eurodollar Reference
Rate is a rate per annum determined for the applicable interest period by
reference to the London interbank offered rate ("LIBOR"), or if such rate is no
longer available, a successor benchmark rate determined in accordance with
customary LIBOR replacement provisions. Interest will generally be payable on
the first business day of each calendar month.
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