CARMAX INC: Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant (Form 8-K)

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Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant.

At October 15, 2021, CarMax, Inc. (the “Company”) and CarMax Auto Superstores, Inc. (“CASI” or “the Borrower”) has entered into a term credit agreement (the “Credit Agreement”) with National Association of American Banks, as lender and as administrative agent, and other lenders who are parties to it.

The credit agreement provides for a term loan facility under which the borrower has borrowed term loans in the aggregate principal amount of $ 700,000,000 (the “Term Loan Facility”). The term loan facility will mature on October 15, 2026. The proceeds of the term loan facility were used to repay borrowings in the ordinary course of $ 1.45 billion unsecured revolving credit facility and for other working capital and general business purposes. We continue to aim for an adjusted debt to total capital ratio in the range of 35% to 45%. Borrowings and other obligations under the credit agreement are guaranteed by the Company and certain of its subsidiaries.

Borrowings under the Term Loan Facility will generally bear interest at a “Eurodollar Reference Rate” plus an applicable margin. The Eurodollar Reference Rate is an annual rate determined for the interest period applicable by reference to the London Interbank Offered Rate (“LIBOR”), or if such rate is no longer available, a successor benchmark rate determined in accordance with customary LIBOR replacement arrangements. Interest will generally be payable on the first business day of each calendar month.

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