ADVANCE AUTO PARTS, INC. (NYSE:AAP) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
The disclosure under Item 2.03 of this Current Report on Form 8-K
is incorporated herein by reference.
is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
Termination of Credit Agreement
On January 31, 2017, in conjunction with entering into a credit
facility (as more fully described in Item 2.03 below), Advance
Stores Company, Incorporated (Advance Stores) terminated the
Credit Agreement dated as of December 5, 2013 (the 2013 Credit
Agreement), among Advance Auto Parts, Inc. (the Company), Advance
Stores, as Borrower, and JPMorgan Chase Bank, N.A., as
Administrative Agent, which was filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed December 9, 2013. Upon
execution of the credit facility described below, the lenders
commitments under the 2013 Credit Agreement were terminated and
the liability of the Company and its subsidiaries with respect to
their obligations under the 2013 Credit Agreement was discharged.
facility (as more fully described in Item 2.03 below), Advance
Stores Company, Incorporated (Advance Stores) terminated the
Credit Agreement dated as of December 5, 2013 (the 2013 Credit
Agreement), among Advance Auto Parts, Inc. (the Company), Advance
Stores, as Borrower, and JPMorgan Chase Bank, N.A., as
Administrative Agent, which was filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed December 9, 2013. Upon
execution of the credit facility described below, the lenders
commitments under the 2013 Credit Agreement were terminated and
the liability of the Company and its subsidiaries with respect to
their obligations under the 2013 Credit Agreement was discharged.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Entry into Credit Agreement
On January 31, 2017, the Company, as Guarantor, entered into a
new credit agreement which provides a $1 billion unsecured
revolving credit facility (the 2017 Credit Agreement) with
Advance Stores, as Borrower, the lenders party thereto, and Bank
of America, N.A., Administrative Agent (the “Agent”). This new
revolver under the 2017 Credit Agreement replaced the revolver
under the 2013 Credit Agreement (terminated as described in Item
1.02 above). The new revolver provides for the issuance of
letters of credit with a sublimit of $200 million. The Company
may request that the total revolving commitment be increased by
an amount not exceeding $250 million during the term of the 2017
Credit Agreement. Voluntary prepayments and voluntary reductions
of the revolving loan balance, if any, are permitted in whole or
in part, at the Companys option, in minimum principal amounts as
specified in the 2017 Credit Agreement.
new credit agreement which provides a $1 billion unsecured
revolving credit facility (the 2017 Credit Agreement) with
Advance Stores, as Borrower, the lenders party thereto, and Bank
of America, N.A., Administrative Agent (the “Agent”). This new
revolver under the 2017 Credit Agreement replaced the revolver
under the 2013 Credit Agreement (terminated as described in Item
1.02 above). The new revolver provides for the issuance of
letters of credit with a sublimit of $200 million. The Company
may request that the total revolving commitment be increased by
an amount not exceeding $250 million during the term of the 2017
Credit Agreement. Voluntary prepayments and voluntary reductions
of the revolving loan balance, if any, are permitted in whole or
in part, at the Companys option, in minimum principal amounts as
specified in the 2017 Credit Agreement.
The interest rates on outstanding amounts, if any, on the
revolving facility under the 2017 Credit Agreement will be based,
at the Companys option, on an adjusted LIBOR, plus a margin, or
an alternate base rate, plus a margin. After an initial interest
period, the Company may elect to convert a particular borrowing
to a different type. The initial margins per annum for the
revolving loan are, 1.10% for the adjusted LIBOR and 0.10% for
alternate base rate borrowings. A facility fee of 0.15% per annum
will be charged on the total revolving facility commitment,
payable quarterly in arrears. Under the terms of the 2017 Credit
Agreement, the interest rate spread, facility fee and commitment
fee will be based on the Companys credit rating. The revolving
facility terminates in January 2022; however, the Company may
request one or two one-year extensions of the termination date
prior to the first or second anniversary of the Closing Date.
revolving facility under the 2017 Credit Agreement will be based,
at the Companys option, on an adjusted LIBOR, plus a margin, or
an alternate base rate, plus a margin. After an initial interest
period, the Company may elect to convert a particular borrowing
to a different type. The initial margins per annum for the
revolving loan are, 1.10% for the adjusted LIBOR and 0.10% for
alternate base rate borrowings. A facility fee of 0.15% per annum
will be charged on the total revolving facility commitment,
payable quarterly in arrears. Under the terms of the 2017 Credit
Agreement, the interest rate spread, facility fee and commitment
fee will be based on the Companys credit rating. The revolving
facility terminates in January 2022; however, the Company may
request one or two one-year extensions of the termination date
prior to the first or second anniversary of the Closing Date.
The 2017 Credit Agreement is guaranteed by the Company and the
Guarantors to the Guarantee Agreement (the Guarantee Agreement)
among the Company, Advance Stores, and the Guarantors in favor of
the Agent for the lenders under the 2017 Credit Agreement.
Guarantors to the Guarantee Agreement (the Guarantee Agreement)
among the Company, Advance Stores, and the Guarantors in favor of
the Agent for the lenders under the 2017 Credit Agreement.
The 2017 Credit Agreement contains customary covenants
restricting the ability of: (a) Advance Stores and its
subsidiaries to, among other things, (i) create, incur or assume
additional debt (only with respect to subsidiaries of Advance
Stores), (ii) incur liens, (iii) guarantee obligations, and (iv)
change the nature of its business conducted by itself and its
subsidiaries; (b) the Company, Advance Stores and their
subsidiaries to, among other things (i) enter into certain
hedging arrangements, (ii) enter into restrictive agreements
limiting their ability to incur liens on any of their property or
assets, pay distributions, repay loans, or guarantee indebtedness
of their subsidiaries; and (c) the Company, among other things,
to change the holding company status of the Company. Advance
Stores is required to comply with financial covenants with
respect to a maximum leverage ratio and a minimum coverage ratio.
The 2017 Credit Agreement also provides for customary events of
default, including non-payment defaults, covenant defaults and
cross-defaults of Advance Stores other material indebtedness.
restricting the ability of: (a) Advance Stores and its
subsidiaries to, among other things, (i) create, incur or assume
additional debt (only with respect to subsidiaries of Advance
Stores), (ii) incur liens, (iii) guarantee obligations, and (iv)
change the nature of its business conducted by itself and its
subsidiaries; (b) the Company, Advance Stores and their
subsidiaries to, among other things (i) enter into certain
hedging arrangements, (ii) enter into restrictive agreements
limiting their ability to incur liens on any of their property or
assets, pay distributions, repay loans, or guarantee indebtedness
of their subsidiaries; and (c) the Company, among other things,
to change the holding company status of the Company. Advance
Stores is required to comply with financial covenants with
respect to a maximum leverage ratio and a minimum coverage ratio.
The 2017 Credit Agreement also provides for customary events of
default, including non-payment defaults, covenant defaults and
cross-defaults of Advance Stores other material indebtedness.
The above description of the 2017 Credit Agreement and the
related Guarantee Agreement is not complete and is qualified in
its entirety by the full text of the respective agreements, which
are filed as Exhibits 10.1 and 10.2 to this Current Report on
Form 8-K.
related Guarantee Agreement is not complete and is qualified in
its entirety by the full text of the respective agreements, which
are filed as Exhibits 10.1 and 10.2 to this Current Report on
Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Description of Exhibit
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10.1
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Credit Agreement, dated as of January 31, 2017, among
Advance Auto Parts, Inc., Advance Stores Company, Incorporated, the lenders party thereto, and Bank of America, N.A., as Administrative Agent. |
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10.2
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Guarantee Agreement, dated as of January 31, 2017,
among Advance Auto Parts, Inc., Advance Stores Company, Incorporated, the other guarantors from time to time party thereto and Bank of America, N.A., as administrative agent for the lenders. |
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to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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ADVANCE AUTO PARTS, INC.
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(Registrant)
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Date: February 6, 2017
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/s/ Thomas B. Okray
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()*
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Thomas B. Okray
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Executive Vice President and Chief Financial Officer
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* Print name and title of the signing officer under his
About ADVANCE AUTO PARTS, INC. (NYSE:AAP)
Advance Auto Parts, Inc. provides automotive aftermarket parts in North America, serving do-it-for-me (commercial) and do-it-yourself (DIY), customers, as well as independently owned operators. The Company’s stores and branches offer a selection of brand name, original equipment manufacturer (OEM) and private label automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy duty trucks. The Company also offers other miscellaneous offerings, including e-services. The Company operates approximately 5,170 total stores and over 120 branches, which operate in the United States, Canada, Puerto Rico and the United States Virgin Islands under the names Advance Auto Parts, Autopart International (AI), Carquest and Worldpac. The Company serves its commercial customers and DIY customers through various channels ranging from traditional brick and mortar store locations to self-serving e-commerce sites. ADVANCE AUTO PARTS, INC. (NYSE:AAP) Recent Trading Information
ADVANCE AUTO PARTS, INC. (NYSE:AAP) closed its last trading session down -2.48 at 160.27 with 944,739 shares trading hands.
