8-KMaterial AgreementsExhibits & Filings

O REILLY AUTOMOTIVE INC 8-K Report, Material Agreement (Jun 15, 2022)

Filed June 15, 2022For Securities:ORLY

Summary

O'Reilly Automotive, Inc. (ORLY) has announced the issuance and sale of $850 million aggregate principal amount of 4.700% Senior Notes due 2032. This financing event, detailed in an 8-K filing dated June 15, 2022, aims to bolster the company's capital structure and provide flexibility for future operations and strategic initiatives. The notes are unsecured, general senior obligations of the company, bearing interest payable semi-annually, with a maturity date in June 2032. Investors should note that while the notes are not initially guaranteed by subsidiaries, such guarantees would be required if subsidiaries incur or guarantee obligations under the company's credit facility or certain other debt. The indenture includes covenants that restrict the company and its subsidiaries from creating certain liens, entering into specific sale and leaseback transactions, and limits the ability to merge or transfer substantially all assets. The filing also outlines customary event of default provisions, including those related to payment defaults, covenant breaches, and bankruptcy. The company retains the option to redeem the notes prior to maturity under specific conditions, and a Change of Control Triggering Event would grant noteholders the right to require repurchase.

Key Highlights

  • 1O'Reilly Automotive, Inc. issued $850 million of 4.700% Senior Notes due June 15, 2032.
  • 2The notes are unsecured general senior obligations of the company.
  • 3Interest on the notes is payable semi-annually on June 15 and December 15.
  • 4The company can redeem the notes at its option prior to maturity, with specific call provisions and pricing.
  • 5A Change of Control Triggering Event allows noteholders to require repurchase at 101% of principal.
  • 6The indenture includes covenants restricting liens, sale-leaseback transactions, and mergers/asset transfers.
  • 7Customary event of default provisions are detailed, including acceleration rights for the Trustee or noteholders.

Frequently Asked Questions

The filing does not explicitly state the exact purpose of the $850 million Senior Notes issuance. However, such debt issuances are typically undertaken by companies to fund general corporate purposes, capital expenditures, potential acquisitions, debt refinancing, or to enhance financial flexibility.

No, the 4.700% Senior Notes due 2032 are designated as general unsecured senior obligations of O'Reilly Automotive, Inc. They are effectively junior to any future secured indebtedness of the company to the extent of the value of the collateral securing such debt.

The notes are not initially guaranteed by any of the company's subsidiaries. However, the indenture requires that if any subsidiary incurs or guarantees obligations under the company's credit facility or certain other specified debt in the future, that subsidiary must also guarantee these Senior Notes on a senior unsecured basis.

O'Reilly can redeem the notes before maturity under two main scenarios. Prior to March 15, 2032 (the 'Par Call Date'), the company can redeem them at its option, with the redemption price calculated based on the present value of remaining payments plus a spread, or 100% of the principal amount, whichever is greater. On or after the Par Call Date, the company can redeem them at 100% of the principal amount.