8-KMaterial AgreementsFinancial EventsExhibits & Filings

CINTAS CORP 8-K Report, Material Agreement (Oct 1, 2010)

Filed October 1, 2010For Securities:CTAS

Summary

This 8-K filing by Cintas Corporation (CTAS) on October 1, 2010, primarily details a material amendment to its existing credit agreement. The key change involves extending the maturity date of the credit facility from February 23, 2011, to September 26, 2014. This extension provides Cintas with greater financial flexibility and a longer runway for its debt obligations. While the maturity date is extended, the total revolving commitment under the credit agreement has been reduced from $600 million to $300 million. However, Cintas retains an option to increase this commitment by up to $150 million with lender consent, offering a potential for future expansion. The filing also notes an increase in facility fees and interest margins, which are tied to the company's credit ratings, indicating a slightly higher cost of borrowing. No loans were outstanding at the time of the filing, but $93.8 million in letters of credit were in place.

Key Highlights

  • 1Maturity date of the credit agreement extended from February 23, 2011, to September 26, 2014.
  • 2Total revolving commitment reduced from $600 million to $300 million.
  • 3Cintas has an option to increase the revolving commitment by up to $150 million, subject to agent and lender consent.
  • 4Facility fees and interest rate margins have increased, based on the company's credit ratings.
  • 5No loans were outstanding under the credit agreement as of September 27, 2010.
  • 6Outstanding letters of credit totaled $93,824,000 as of the event date.
  • 7The amendment was entered into by Cintas Corporation No. 2, a wholly-owned subsidiary, with guarantees from the parent corporation.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce a material amendment to Cintas Corporation's existing credit agreement. This amendment includes extending the maturity date and adjusting the size and terms of the revolving credit facility.

The credit facility's maturity date has been extended to September 26, 2014. The total revolving commitment has been reduced from $600 million to $300 million, but Cintas has the option to increase it by up to $150 million. Facility fees and interest margins have also increased.

The extended maturity provides greater financial flexibility by deferring debt obligations. The reduced commitment implies a potentially lower immediate need for credit or a strategic decision to manage debt levels. The increased fees and margins suggest a slightly higher cost of borrowing, though the actual impact depends on credit ratings and utilization.

At the time of the amendment (September 27, 2010), there were no loans outstanding under the credit agreement. However, $93,824,000 in letters of credit were outstanding.