8-KMaterial AgreementsFinancial EventsOther Events+1

FASTENAL CO 8-K Report, Material Agreement (May 5, 2015)

Filed May 5, 2015For Securities:FAST

Summary

Fastenal Company (FAST) announced on May 5, 2015, the execution of a new $500,000,000 unsecured revolving credit facility with Wells Fargo Bank, National Association, replacing its existing credit agreement. This facility, set to expire on March 1, 2018, includes subfacilities for letters of credit and swing line loans, and is guaranteed by Fastenal's material domestic subsidiaries. The new agreement provides Fastenal with enhanced financial flexibility and demonstrates the company's continued access to capital markets. In addition to the new credit facility, Fastenal's board of directors authorized the repurchase of an additional 4,000,000 shares of common stock. This follows the recent exhaustion of a prior authorization and indicates management's confidence in the company's financial position and its commitment to returning capital to shareholders. These developments are significant for investors, highlighting Fastenal's strategic financial management and shareholder-friendly capital allocation policies.

Key Highlights

  • 1Entered into a new $500 million unsecured revolving credit facility with Wells Fargo, replacing the prior agreement.
  • 2The new credit facility has a maturity date of March 1, 2018.
  • 3Includes a $55 million letter of credit subfacility and a $25 million uncommitted swing line loan subfacility.
  • 4The credit agreement contains financial covenants, including a maximum consolidated total leverage ratio of 1.75 to 1.00 and a minimum EBITDA of $400,000,000.
  • 5The company's board authorized an additional 4,000,000 share repurchase authorization.
  • 6This new share repurchase authorization has no expiration date.

Frequently Asked Questions

The new unsecured revolving credit facility is for $500,000,000. It includes a $55 million letter of credit subfacility and a $25 million uncommitted swing line loan subfacility. The facility expires on March 1, 2018, and is guaranteed by Fastenal's material domestic subsidiaries.

The credit agreement requires Fastenal to maintain a consolidated total leverage ratio of no more than 1.75 to 1.00 and EBITDA of no less than $400,000,000 over any consecutive four-quarter period. These are measured as of the end of each fiscal quarter.

Fastenal's board of directors authorized the repurchase of an additional 4,000,000 shares of common stock. This new authorization, which has no expiration date, brings the total current authorization for share repurchases to 4,000,000 shares.

Loans under the facility will bear interest at LIBOR plus 0.95%, with a LIBOR floor of 0.00%. Commitment fees on the unused portion of the facility range from 0.10% to 0.125% per annum, depending on utilization. There are also commission and issuance fees associated with letters of credit.