Summary
O'Reilly Automotive, Inc. (ORLY) filed an 8-K on March 8, 2016, to report the issuance and sale of $500 million in aggregate principal amount of 3.550% Senior Notes due 2026. These notes represent unsecured senior obligations of the company and are guaranteed on a senior unsecured basis by most of its subsidiaries. The issuance was made under a shelf registration statement filed on February 29, 2016. The new notes mature on March 15, 2026, and bear a coupon of 3.550%. The indenture governing these notes includes covenants that restrict the company's ability to incur certain liens, enter into sale and leaseback transactions, and merge or consolidate, subject to certain exceptions. It also outlines standard event of default provisions, including those related to payment failures, covenant breaches, and insolvency. Investors should note that the trustee for these notes also serves in other capacities, including as trustee for existing notes and as a lender under the company's credit facility.
Key Highlights
- 1O'Reilly Automotive successfully issued $500 million in Senior Notes due 2026.
- 2The notes carry a fixed interest rate of 3.550% per annum.
- 3The issuance was conducted under a shelf registration statement filed earlier in March 2016.
- 4The notes are unsecured senior obligations, ranking equally with existing unsecured and unsubordinated debt.
- 5Most of O'Reilly's subsidiaries are providing senior unsecured guarantees for these notes.
- 6The indenture includes covenants restricting liens, sale and leaseback transactions, and mergers/consolidations.
- 7Standard event of default clauses are present, covering payment defaults, covenant breaches, and insolvency.