8-KMaterial AgreementsFinancial EventsExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Material Agreement (Oct 4, 2005)

Filed October 4, 2005For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) has entered into a new material definitive agreement by executing a Promissory Note with UMB Bank, n.a. This new note establishes a revolving line of credit totaling $50,000,000, significantly increasing the company's borrowing capacity from its previous $35,000,000 arrangement with the same lender. The purpose of this increased credit facility is to support short-term operating expenses and potentially finance acquisitions of convenience store properties. The new line of credit features a variable interest rate tied to the Fed Funds Rate, initially set at 0.750% above the index, resulting in an initial annual rate of 4.500%. While the note provides flexibility for the company to draw funds, it is at the lender's sole discretion and subject to specific conditions. The note is payable on demand, with monthly interest payments commencing November 1, 2005, and the entire principal due upon demand or default. Investors should note the events of default, including a change in 25% or more of the company's common stock ownership and material adverse changes in financial condition, which could trigger immediate repayment obligations.

Key Highlights

  • 1Casey's General Stores, Inc. entered into a new $50 million revolving line of credit with UMB Bank, n.a., replacing a prior $35 million facility.
  • 2The new credit agreement is documented via a Promissory Note dated October 1, 2005.
  • 3The company intends to utilize these funds for short-term operating expenses and the acquisition of convenience store properties.
  • 4The interest rate on the note is variable, pegged at 0.750% above the Fed Funds Rate, with an initial rate of 4.500% per annum.
  • 5The note is payable in full upon the lender's demand.
  • 6Events of default are outlined, including payment defaults, noncompliance with covenants, insolvency, and a change in 25% or more of the company's common stock ownership.
  • 7In the event of default, the entire unpaid principal and accrued interest become immediately due and payable.

Frequently Asked Questions

The primary purpose of the new $50 million line of credit is to finance short-term operating expenses incurred in the ordinary course of business. Additionally, the company may use these funds to finance, on a short-term basis, payments required for the purchase of other convenience store properties.

The interest rate is variable and tied to the Fed Funds Rate (the "Index"). It is calculated as 0.750% above the Index. The initial interest rate was 4.500% per annum, based on the Fed Funds Rate at the time of the agreement. The rate can change daily.

The note is payable in full upon the lender's demand. Specific events of default that could trigger this demand include payment defaults, failure to comply with other terms, providing false or misleading information, insolvency, commencement of creditor proceedings, a change in ownership of 25% or more of the company's common stock, a material adverse change in the company's financial condition, or if the lender believes its prospect of payment is impaired or feels insecure.

This new Promissory Note establishes a revolving line of credit for $50,000,000, which is a significant increase from the company's previous line of credit arrangements with the same lender, which were limited to an aggregate principal amount of $35,000,000.