Summary
O'Reilly Automotive, Inc. (ORLY) filed an 8-K on November 25, 2008, reporting the execution of an interest rate swap transaction on November 24, 2008, with SunTrust Bank. This transaction aims to hedge against the risk of fluctuating interest rates tied to LIBOR on an additional $50 million of debt under its existing Credit Agreement. The swap effectively fixes the interest rate at 1.95% plus the applicable margin for the specified notional amount of debt over its one-year term.
Key Highlights
- 1O'Reilly Automotive entered into an interest rate swap with SunTrust Bank on November 24, 2008.
- 2The swap is designed to mitigate interest rate risk on $50 million of floating-rate debt under the company's Credit Agreement.
- 3The floating rate is based on LIBOR.
- 4The interest rate swap has an effective date of November 28, 2008, and a maturity date of November 28, 2009.
- 5The transaction effectively fixes the annual interest rate on the hedged portion of the debt to 1.95% plus the applicable margin.
- 6The company remains ultimately responsible for all amounts due under the Credit Facility.
- 7O'Reilly may enter into additional swap transactions in the future.