Summary
O'Reilly Automotive, Inc. (ORLY) filed an 8-K on August 21, 2012, reporting on the issuance and sale of $300 million aggregate principal amount of 3.800% Senior Notes due 2022. The company entered into an Underwriting Agreement with J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as representatives of the underwriters, on August 16, 2012. The net proceeds from this offering are approximately $296 million, intended for general corporate purposes including working capital, share repurchases, and debt repayment.
Key Highlights
- 1ORLY successfully issued $300 million of 3.800% Senior Notes due September 1, 2022.
- 2The net proceeds from the offering are approximately $296 million after deducting underwriting discounts and expenses.
- 3Proceeds are earmarked for general corporate purposes, which may include share repurchases and debt repayment.
- 4The Notes are senior unsecured obligations and rank equally with existing and future unsecured and unsubordinated indebtedness.
- 5The Notes are guaranteed on a senior unsecured basis by most of ORLY's subsidiaries.
- 6The Indenture includes covenants that limit the company's ability to create certain liens, enter into sale and leaseback transactions, and undergo mergers or consolidations.
- 7Holders may require repurchase at 101% of principal if a Change of Control Triggering Event occurs.
Frequently Asked Questions
This 8-K filing announces O'Reilly Automotive, Inc.'s (ORLY) entry into a material definitive agreement, specifically an Underwriting Agreement for the issuance and sale of $300 million of 3.800% Senior Notes due 2022.
O'Reilly intends to use the net proceeds of approximately $296 million for general corporate purposes. This may include increasing working capital, repurchasing shares of common stock, repaying debt, and pursuing other business opportunities.
The new Senior Notes bear an interest rate of 3.800% per year and mature on September 1, 2022.
Noteholders are protected by covenants that restrict the company's ability to incur certain liens or engage in significant sale/leaseback transactions. Additionally, if a Change of Control Triggering Event occurs, holders have the right to require O'Reilly to repurchase their notes at 101% of the principal amount.