Summary
Copart, Inc. (CPRT) has filed an 8-K report on October 4, 2011, detailing an amendment to its existing Credit Facility with Bank of America, N.A. The primary focus of this amendment is the expansion of the Term Loan Facility, increasing its total availability from $400.0 million to $500.0 million. This move suggests Copart is securing additional capital, potentially to support its ongoing operations, expansion initiatives, or other strategic objectives. Furthermore, the amendment adjusts the quarterly principal repayment schedule and includes minor, non-material changes to financial covenant calculations. Copart has also implemented an interest rate swap agreement to mitigate interest rate risk by fixing the rate on 75% of the Term Loan Facility at 90 basis points over the Eurocurrency Rate. This action demonstrates a proactive approach to managing financial leverage and interest expenses.
Key Highlights
- 1Copart amended its Credit Facility with Bank of America, N.A. on September 29, 2011.
- 2The Term Loan Facility was increased from $400.0 million to $500.0 million, providing an additional $100.0 million in borrowing capacity.
- 3Quarterly principal payments under the Term Loan Facility were adjusted to $18.75 million.
- 4Non-material changes were made to the calculation of financial covenants.
- 5Copart entered into an interest rate swap agreement to fix the interest rate on 75% of the Term Loan Facility.
- 6The swap agreement fixes the rate at 90 basis points over the Eurocurrency Rate, with the Eurocurrency Rate currently at 1.5% for Copart.
- 7Copart incurred an upfront fee of $312,500 for the amendment.