8-KFinancial EventsExhibits & Filings

OLD DOMINION FREIGHT LINE, INC. 8-K Report, Financial Obligation (Aug 16, 2011)

Filed August 16, 2011For Securities:ODFL

Summary

Old Dominion Freight Line, Inc. (ODFL) has entered into a new five-year, $200.0 million senior unsecured revolving credit facility, replacing its previous $225.0 million facility. This new agreement, effective August 10, 2011, with Wells Fargo Bank, National Association as administrative agent, provides the company with financial flexibility for working capital, letter of credit issuance, and general corporate purposes. The facility includes provisions for letters of credit up to $150.0 million and swingline loans of $20.0 million. Importantly, ODFL has the option to request an increase in commitments up to $300.0 million, subject to certain conditions, demonstrating potential for future growth financing. The credit agreement also outlines specific interest rate options, fees, and financial covenants, including a maximum debt-to-capitalization ratio and a minimum fixed charge coverage ratio.

Key Highlights

  • 1ODFL secured a new five-year, $200.0 million senior unsecured revolving credit facility.
  • 2The new credit facility replaces a prior $225.0 million facility, indicating a strategic adjustment in borrowing capacity.
  • 3The facility allows for letters of credit up to $150.0 million and swingline loans up to $20.0 million.
  • 4ODFL has the ability to increase the total commitment up to $300.0 million under specific conditions.
  • 5The credit agreement includes flexible interest rate options based on Base Rate, LIBOR Rate, or LIBOR Market Index Rate.
  • 6Key financial covenants include a maximum Consolidated Debt to Consolidated Total Capitalization ratio of 0.60:1.00 and a minimum Fixed Charge Coverage Ratio of 2.00:1.00.
  • 7The funds are intended for working capital, letter of credit issuance, and general corporate purposes.

Frequently Asked Questions

This 8-K filing announces the creation of a new senior unsecured revolving credit facility by Old Dominion Freight Line, Inc. (ODFL). It details the terms and conditions of this new facility, which is a significant financing arrangement for the company.

The new credit facility has a total commitment of $200.0 million, which is $25.0 million less than the previous $225.0 million facility. However, the new agreement allows for potential future increases up to $300.0 million, providing flexibility.

ODFL must maintain a maximum Consolidated Debt to Consolidated Total Capitalization ratio not exceeding 0.60 to 1.00 and a minimum Fixed Charge Coverage Ratio of not less than 2.00 to 1.00. There are also covenants regarding mergers, indebtedness, liens, asset dispositions, investments, restricted payments, and affiliate transactions.

The company intends to use the proceeds from loans made under this credit agreement for working capital needs, the issuance of letters of credit, and for general corporate purposes, all in accordance with the terms of the agreement.