8-KMaterial AgreementsFinancial EventsExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Material Agreement (Jan 17, 2019)

Filed January 17, 2019For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) announced significant updates to its credit facilities in an 8-K filing on January 17, 2019. The company entered into a new $300 million unsecured revolving credit facility with Royal Bank of Canada, maturing in January 2024. This facility offers flexibility for working capital needs, capital expenditures, share repurchases, and other general corporate purposes. It also includes an expansion option of up to an additional $150 million, subject to certain conditions. Additionally, Casey's renewed its unsecured revolving line of credit with UMB Bank, n.a., reducing the total commitment from $150 million to $25 million. This facility is intended for short-term operating expenses and working capital. While initially unsecured, the primary credit facility has provisions that could require it to become secured if the company's corporate rating falls below investment grade or if certain priority debt thresholds are met. These actions provide Casey's with substantial financial flexibility for its ongoing operations and strategic initiatives.

Key Highlights

  • 1Entered into a new $300 million unsecured revolving credit facility with Royal Bank of Canada, maturing January 11, 2024.
  • 2The new credit facility has an expansion option allowing for an additional $150 million, subject to lender consent and other conditions.
  • 3The $300 million facility can be used for working capital, capital expenditures, share repurchases, and general corporate purposes.
  • 4Renewed an unsecured revolving line of credit with UMB Bank, n.a., decreasing the total commitment from $150 million to $25 million.
  • 5The UMB line is available for short-term operating expenses and working capital.
  • 6The primary credit facility is initially unsecured but can become secured under specific 'Collateral/Covenant Events' such as a below investment grade corporate rating.
  • 7The Credit Agreement includes a financial maintenance covenant requiring the Consolidated Leverage Ratio not to exceed 4.00:1.00 (with a temporary increase to 4.50:1.00 for certain acquisitions).

Frequently Asked Questions

The $300 million unsecured revolving credit facility is designed to provide Casey's General Stores with financial flexibility to fund its working capital needs, capital expenditures, support share repurchases, and address other general corporate purposes.

The credit facility will require collateral if a 'Collateral/Covenant Event' occurs. This includes situations where Casey's obtains a corporate rating that is not investment grade, no longer has a corporate rating, or if subsidiaries are required to provide liens to secure certain 'priority debt' exceeding 20.00% of the Company's Consolidated Net Worth.

Casey's General Stores renewed its unsecured revolving line of credit with UMB Bank, n.a. The total commitment under this line has been reduced from $150 million to $25 million. This facility is primarily for short-term operating expenses and working capital.

Interest rates are variable, based on either LIBOR plus an applicable margin (0.80% to 1.60%) or an alternate base rate plus an applicable margin (0.00% to 0.60%). The facility also carries an annual facility fee of 0.20% to 0.40%, and letters of credit have a participation fee of 0.80% to 1.60%. These rates and fees are tied to Casey's Consolidated Leverage Ratio.