8-KMaterial AgreementsFinancial EventsExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Material Agreement (Jun 18, 2013)

Filed June 18, 2013For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) announced on June 18, 2013, the entry into a material definitive agreement for the issuance of $200 million in Senior Notes. This financing comprises $150 million of 3.67% Senior Notes, Series A, due in 2028, and $50 million of 3.75% Senior Notes, Series B, due in December 2028. The company intends to utilize these proceeds for strategic growth initiatives, including store constructions, remodels, acquisitions, and general working capital. In conjunction with this new debt issuance, Casey's also terminated a $25 million promissory note with UMB Bank, related to its line of credit. This action effectively refinances a portion of its existing credit facility while securing long-term funding for its expansion plans. The Note Purchase Agreement includes standard covenants such as limitations on indebtedness, liens, and mergers, as well as provisions for mandatory and optional prepayments, and terms related to a change of control. Investors should note the financial covenants and potential 'make-whole' payments associated with early prepayments.

Key Highlights

  • 1Issuance of $200 million in Senior Notes to fund growth initiatives.
  • 2The notes consist of two series: $150 million Series A (3.67% due 2028) and $50 million Series B (3.75% due 2028).
  • 3Proceeds will be used for store construction, remodels, acquisitions, and working capital.
  • 4Termination of a $25 million promissory note with UMB Bank as part of the transaction.
  • 5Note Agreement includes mandatory and optional prepayment provisions.
  • 6The agreement contains financial covenants such as maximum indebtedness to EBITDA and minimum fixed charge coverage.
  • 7Provisions for accelerated repayment in case of a Change of Control or Event of Default.

Frequently Asked Questions

The primary purpose is to secure long-term funding for Casey's General Stores' strategic growth initiatives, including new store constructions, remodels of existing stores, potential acquisitions, and to support general working capital needs.

In conjunction with this new debt, Casey's terminated a $25 million promissory note related to its line of credit with UMB Bank. While this specific note was cancelled, the company still has $100 million in outstanding promissory notes with UMB, indicating its ongoing credit line arrangements remain in place.

The Senior Notes have specific interest rates and maturity dates. The Note Agreement also imposes several financial covenants, including a maximum allowed indebtedness relative to EBITDA, a minimum fixed charge coverage ratio, and a minimum consolidated net worth test. Additionally, there are restrictions on total debt, priority debt, liens, mergers, and asset sales. Mandatory and optional prepayments, with potential 'make-whole' amounts for optional prepayments, are also outlined.

In the event of a Change of Control, as defined in the Note Agreement, holders of the Senior Notes have the right to require Casey's to repurchase their notes at 100% of the principal amount plus accrued interest.