8-KMaterial AgreementsFinancial EventsExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Agreement Terminated (Jun 9, 2016)

Filed June 9, 2016For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) announced on June 9, 2016, the execution of two new Promissory Notes with UMB Bank, n.a., totaling $100 million in aggregate principal amount. These notes replace existing credit facilities and establish a revolving line of credit available for short-term operating expenses. This refinancing provides the company with continued access to liquidity. The new credit facility is unsecured and has a variable interest rate tied to the Federal Funds Offered Rate, plus a spread of 0.750% or 1.000% depending on the note, resulting in initial rates of 1.130% and 1.380% per annum. A new Negative Pledge Agreement was also entered into, which restricts the company from creating new liens on its assets unless certain conditions related to its Priority Debt and Consolidated Net Worth are met, ensuring the lender's position is maintained as long as obligations remain outstanding.

Key Highlights

  • 1Casey's General Stores refinanced its credit line, securing a new $100 million revolving credit facility with UMB Bank, n.a.
  • 2The new facility replaces prior credit arrangements dated May 23, 2011.
  • 3The Notes are unsecured and will be used to finance short-term operating expenses.
  • 4Interest rates are variable, based on the Federal Funds Offered Rate plus a spread, with initial rates of 1.130% and 1.380% per annum.
  • 5A Negative Pledge Agreement restricts the creation of new liens on company assets, subject to specific financial covenants regarding Priority Debt and Consolidated Net Worth.
  • 6The new facility remains in effect as long as Casey's has outstanding obligations to UMB Bank.
  • 7Advances under the Notes are at the lender's discretion and subject to certain conditions, including the absence of default or insolvency.

Frequently Asked Questions

The primary purpose of these new Promissory Notes is to establish a $100 million revolving line of credit to finance short-term operating expenses accruing in the ordinary course of Casey's General Stores' business. This effectively replaces and terminates the company's previous line of credit arrangements.

The interest rates are variable, based on the Federal Funds Offered Rate (Index). One note carries an interest rate of 0.750% over the Index (initial rate of 1.130% per annum), and the second note carries an interest rate of 1.000% over the Index (initial rate of 1.380% per annum).

Yes, a new Negative Pledge Agreement restricts Casey's from creating or permitting new liens on its properties or assets without the lender's prior written consent, unless specific exceptions apply. These exceptions include liens that do not cause the company's 'Priority Debt' to exceed 20% of its 'Consolidated Net Worth', as defined in prior agreements.

If Casey's is in default under the terms of the Notes or any agreement with the Lender, ceases doing business, is insolvent, misuses funds, or if the Lender feels insecure, the Lender has no obligation to advance funds under the Notes. Each advance is at the Lender's sole discretion.