Summary
AutoZone, Inc. (AZO) filed an 8-K report on April 29, 2015, to disclose the issuance of new debt. The company successfully sold $250 million in 2.500% Notes due 2021 and $400 million in 3.250% Notes due 2025, totaling $650 million in aggregate principal amount. These notes are senior unsecured debt obligations, ranking equally with other senior unsecured liabilities, and bear fixed interest rates payable semi-annually. The proceeds from this offering were made under the company's existing shelf registration statement, indicating a strategic move to bolster its capital structure or fund ongoing operations and growth initiatives.
Key Highlights
- 1AutoZone issued $250 million of 2.500% Notes due 2021.
- 2AutoZone issued $400 million of 3.250% Notes due 2021.
- 3Total aggregate principal amount of new debt issued is $650 million.
- 4The notes are senior unsecured debt obligations.
- 5Interest on the notes is payable semi-annually.
- 6The issuance was made under the company's shelf registration statement filed on Form S-3.
- 7The debt issuance includes provisions for redemption at the company's option and repurchase upon a change of control.
Frequently Asked Questions
This 8-K filing is to report a material event, specifically the creation of a direct financial obligation. AutoZone Inc. announced the completion of the sale of $650 million in aggregate principal amount of its 2.500% Notes due 2021 and 3.250% Notes due 2025.
The notes consist of $250 million of 2.500% Notes due April 15, 2021, and $400 million of 3.250% Notes due April 15, 2025. Both bear fixed interest rates payable semi-annually. They are senior unsecured debt obligations of AutoZone.
The new notes rank equally with AutoZone's other senior unsecured liabilities and senior to any future subordinated indebtedness. The Indenture includes customary covenants restricting the company's ability to incur secured debt, enter sale and leaseback transactions, or merge/consolidate under certain conditions.
Yes, AutoZone has the option to redeem the notes, in whole or in part, at specified redemption prices. Additionally, in the event of a change of control, holders of the notes may require AutoZone to repurchase them, unless the company has exercised its redemption option.