8-KMaterial AgreementsOther EventsExhibits & Filings

O REILLY AUTOMOTIVE INC 8-K Report, Material Agreement (Sep 9, 2011)

Filed September 9, 2011For Securities:ORLY

Summary

O'Reilly Automotive, Inc. (ORLY) filed an 8-K on September 9, 2011, to report on a material amendment to its existing credit agreement. The company entered into Amendment No. 1 to its Credit Agreement, which primarily involved a reduction in aggregate credit commitments to $660 million in senior unsecured revolving credit. This amendment also extended the maturity date to September 9, 2016, and importantly, lowered the interest rate margins and facility fees applicable to borrowings. This refinancing demonstrates O'Reilly's improved credit standing, allowing for more favorable borrowing terms. The reduced costs associated with its credit facility are a positive signal for investors regarding the company's financial management and access to capital. Additionally, the filing notes the payment of a $20.9 million penalty related to the DOJ investigation into CSK Auto Corporation's pre-acquisition accounting practices, which provides closure on this historical issue.

Key Highlights

  • 1O'Reilly Automotive, Inc. amended its senior unsecured revolving credit agreement on September 9, 2011.
  • 2The aggregate credit commitments were reduced to $660 million, with sub-limits for letters of credit and swing line borrowings.
  • 3An uncommitted incremental facility allows for potential increases of up to $200 million in credit commitments.
  • 4The maturity date of the credit facility was extended to September 9, 2016.
  • 5Interest rate margins and facility fees were decreased, reflecting improved credit terms.
  • 6The company's subsidiaries, with limited exceptions, guarantee the obligations under the credit agreement.
  • 7O'Reilly paid a $20.9 million penalty to the DOJ concerning CSK Auto Corporation's pre-acquisition accounting.

Frequently Asked Questions

This 8-K filing reports on O'Reilly Automotive, Inc.'s entry into an amendment (Amendment No. 1) to its existing credit agreement, primarily to extend the maturity date and adjust the terms of its revolving credit facility.

The key changes include a reduction in aggregate commitments to $660 million, an extension of the maturity date to September 9, 2016, and a decrease in both interest rate margins and facility fees, which is a positive development indicating improved borrowing costs.

The filing indicates a reduction in aggregate commitments to $660 million. However, there's also an uncommitted incremental facility that allows for potential future increases, providing flexibility. Importantly, there were no outstanding borrowings under the credit facility as of the amendment date, suggesting this is a proactive refinancing rather than a response to immediate debt needs.

The $20.9 million payment represents a one-time monetary penalty paid to the Department of Justice (DOJ) related to an investigation into CSK Auto Corporation's pre-acquisition accounting practices. This payment signifies the resolution of that specific issue.