8-KMaterial AgreementsFinancial EventsExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Material Agreement (Jul 7, 2020)

Filed July 7, 2020For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) announced on July 7, 2020, a significant financing arrangement through a Note Purchase Agreement (NPA) entered into on June 30, 2020. The company will issue $650,000,000 in aggregate principal amount of senior notes, split into two tranches: $325,000,000 of 2.85% Senior Notes, Series G, due August 7, 2030, and $325,000,000 of 2.96% Senior Notes, Series H, due August 6, 2032. The proceeds are earmarked for refinancing existing indebtedness, specifically the 2010 senior notes maturing in August 2020, as well as for working capital and general corporate purposes. This transaction reflects Casey's proactive approach to managing its debt structure and capital costs. The new notes carry relatively low interest rates, suggesting favorable market conditions or a strong credit profile for the company at the time of issuance. The filing also details important covenants within the NPA, including a maximum debt-to-EBITDA ratio, minimum fixed charge coverage, and a minimum net worth. Notably, the company must maintain a BBB-/Baa3 corporate rating and is subject to limitations on priority debt, liens, and asset sales. Amendments to existing note purchase agreements and the credit agreement were also made concurrently to align with the new NPA, incorporating features like an "Acquisition Holiday" and the Ratings Maintenance Covenant.

Key Highlights

  • 1Casey's General Stores issued $650 million in senior notes to refinance existing debt and fund general corporate purposes.
  • 2The new debt comprises $325 million of 2.85% Senior Notes due 2030 and $325 million of 2.96% Senior Notes due 2032.
  • 3The issuance is expected to occur on August 7, 2020, subject to customary closing conditions.
  • 4The Note Purchase Agreement (NPA) includes covenants such as a maximum Consolidated Total Debt to Consolidated EBITDA ratio of 3.50:1.00 (with a temporary increase to 4.00:1.00 for acquisitions).
  • 5A minimum fixed charge coverage ratio and a minimum consolidated net worth test are also stipulated in the NPA.
  • 6Casey's must maintain a corporate rating of BBB-/Baa3 or higher to comply with the Ratings Maintenance Covenant.
  • 7Amendments to existing credit agreements were made to incorporate terms consistent with the new NPA, including an "Acquisition Holiday" and the Ratings Maintenance Covenant.

Frequently Asked Questions

The primary purpose is to refinance existing indebtedness, specifically the company's 2010 senior notes maturing in August 2020. Additionally, the proceeds will be used for working capital and general corporate purposes.

The company is issuing $325,000,000 of 2.85% Senior Notes, Series G, due August 7, 2030, and $325,000,000 of 2.96% Senior Notes, Series H, due August 6, 2032. Interest is payable semi-annually.

Key financial covenants include a maximum Consolidated Total Debt to Consolidated EBITDA ratio of 3.50:1.00 (which can temporarily increase to 4.00:1.00 for certain acquisitions), a minimum fixed charge coverage ratio, and a minimum consolidated net worth test. The company must also maintain a BBB-/Baa3 or higher corporate rating.

Yes, the NPA allows for prepayment of all or a portion of the notes, subject to a "Make-Whole Amount." In the event of a Change of Control, noteholders have the right to require the company to repurchase their notes at par value plus accrued interest.