Business Context and Reporting Period
This Form 8-K filing by CARMAX INC (CarMax) reports on events occurring on December 8, 2006, with the report dated December 14, 2006. The filing details the entry into a material definitive agreement regarding the company's revolving credit facility.
Key Financial Metrics
- Credit Facility Limit: Increased from $450 million to $500 million.
- Swing Line Loans: Increased from $25 million to $35 million.
- Outstanding Borrowings: Approximately $127 million as of December 8, 2006.
- Interest Rates: The amendment decreased the per annum rate for Eurodollar Rate Loans, Letter of Credit Fees, and Commitment Fees.
- Maturity Date: Extended to December 8, 2011.
Material Changes Versus Prior Period
The primary material change is the execution of Amendment No. 1 to the Credit Agreement originally entered on August 24, 2005. Key changes include:
- Extension of the credit agreement term by approximately two years (from August 2009 to December 2011).
- Increase in aggregate borrowing capacity by $50 million.
- Reduction in applicable interest rates and fees.
- Joinder of Comerica Bank as a new lender.
Guidance, Outlook, and Management Commentary
The filing does not provide specific revenue guidance, profit outlook, or management commentary regarding future operational performance. However, the amendment provides the Registrant with an option to request an increase in the aggregate borrowings limit of up to an additional $100 million. The filing notes that lenders also provide other services including cash management, asset-backed securitization, retail installment financing, and derivative transactions.
Important Facts for Investor Verification
- Verify the specific new interest rate definitions and fee structures under the "Applicable Rate" clause.
- Confirm the utilization rate of the credit facility ($127 million outstanding vs. $500 million limit).
- Review the terms of the option to increase the borrowing limit by an additional $100 million.
- Check for any covenants or conditions attached to the new maturity date of December 8, 2011.