Summary
AutoZone, Inc. (AZO) filed an 8-K on August 4, 2008, to report the creation of direct financial obligations through the issuance of new senior unsecured notes. The company has issued $500 million aggregate principal amount of 6.500% Senior Notes due 2014 and $250 million aggregate principal amount of 7.125% Senior Notes due 2018. These notes were offered and sold under a previously filed shelf registration statement. These new notes represent a significant addition to AutoZone's debt capital structure. Investors should note that the notes are senior unsecured obligations, ranking equally with other senior unsecured liabilities. The filing details standard covenants restricting the company's ability to incur secured debt, engage in sale and leaseback transactions, or undergo major corporate changes. The company also retains the option to redeem the notes, and noteholders have a put option in the event of a change of control, with provisions for interest rate adjustments based on credit rating changes.
Key Highlights
- 1AutoZone issued $750 million in new senior unsecured notes: $500 million of 6.500% Senior Notes due 2014 and $250 million of 7.125% Senior Notes due 2018.
- 2The notes were issued under a Form S-3 shelf registration statement filed on July 29, 2008.
- 3The notes are senior unsecured obligations, ranking equally with other senior unsecured liabilities.
- 4The company has standard covenants in place to restrict debt, sale-leasebacks, and mergers/acquisitions.
- 5AutoZone has the option to redeem the notes at specified prices.
- 6Noteholders have the right to require repurchase in case of a change of control event.
- 7The interest rate on the notes is subject to adjustment based on credit rating changes.