Item 1.01. Entry
into a Material Definitive Agreement.
Casey’s
General Stores, Inc. (the “Company”) is party to a credit agreement dated January 11, 2019, as amended June 30, 2020
(the “Existing Credit Agreement”), with Royal Bank of Canada, as administrative agent (the “Administrative
Agent”), and the lenders and issuing banks from time-to-time party thereto.
On December 23, 2020 (the “Effective
Date”), the Company entered into a second amendment (“the Amendment”) to the Existing Credit Agreement (together
with the Amendment, the “Credit Agreement”) to: (a) increase the revolving commitments thereunder to an aggregate principal
amount of $450 million (the “Revolving Facility Increase”, and together with the existing revolving commitments the
“Revolving Facility”); and (b) provide for a senior unsecured delayed-draw term loan facility in an aggregate principal
amount of up to $300 million.
There are no material changes to the
covenants or the events of default in the Credit Agreement as a result of the Amendment.
Revolving Facility Increase
The Amendment increased the total borrowing
capacity under the Revolving Facility by an aggregate principal amount of $150 million, from $300 million to $450 million. The
maturity date of the Revolving Facility remains unchanged, at January 11, 2024. Borrowings under the Revolving Facility
are available to finance the Company’s previously announced and pending acquisition of Bucky’s Convenience Stores (the
“Acquisition”) and for working capital needs, capital expenditures, commercial paper backstops, share repurchases and
general corporate purposes.
Amounts
borrowed under the Revolving Facility will bear interest at variable rates based upon, at the Company’s option, either: (a)
the LIBO Rate adjusted for statutory reserve requirements (but no less than 0.75%) (the “Adjusted LIBO Rate”), plus
a margin ranging from 1.05% to 1.85%; or (b) an alternate base rate, which is the higher of (i) the prime rate announced by the
Administrative Agent, (ii) the federal funds rate plus 1/2 of 1.00%, and (iii) the one-month LIBO Rate plus 1.00% (as applicable,
the “ABR Rate”), plus a margin ranging from 0.05% to 0.85%. The Revolving Facility also carries a facility fee of 0.20%
to 0.40% per annum. The applicable margins and facility fee are dependent upon the Company’s Consolidated Leverage Ratio,
as calculated quarterly in accordance with the Credit Agreement (the “Consolidated Leverage Ratio”).
Term Loan Facility
The Amendment provides for a new senior
unsecured delayed-draw term loan facility in an aggregate principal amount of up to $300 million, which may be drawn in a single
borrowing for up to three months from the Effective Date (the “Term Loan Facility”). The Term Loan Facility has a maturity
date of January 6, 2026 (the “Term Loan Maturity Date”) and its proceeds may be used to finance the Acquisition and
for working capital needs, capital expenditures, share repurchases and general corporate purposes.
Amounts
borrowed under the Term Loan Facility will bear interest at variable rates based upon, at the Company’s option, either: (i)
the Adjusted LIBO Rate, plus a margin ranging from 1.55% to 2.60%; or (ii) the ABR Rate, plus a margin ranging from 0.20% to 1.60%.
The Term Loan Facility also carries a facility fee of 0.20% to 0.40% per annum. The applicable margins and facility fee are dependent
upon the Consolidated Leverage Ratio.
The outstanding principal balance of
the loan drawn on the Term Loan Facility is required to be repaid in equal quarterly installments in an amount equal to 1.25% of
the original principal amount, on the last day of each March, June, September and December following the Effective Date, commencing
on March 31, 2021, with the balance due on the Term Loan Maturity Date. Mandatory prepayments
are required with: (a) 100% of the net cash proceeds of casualty events and non-ordinary course asset sales in excess of
$25 million, subject to customary reinvestment rights and exceptions set forth in the Credit Agreement; and (b) 100% of the net
cash proceeds of debt obligations, other than debt permitted under the Credit Agreement.
The foregoing descriptions are qualified
in their entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 and is incorporated herein by reference.
Bridge Loan Commitment
As a result of, and concurrent
with the effectiveness of the Amendment, the commitments under the previously announced 364-Day Bridge Loan Commitment Letter with
Goldman Sachs Bank USA dated November 8, 2020, were reduced in accordance with the terms thereof.
Certain
of the lenders and the Administrative Agent and their affiliates have provided, and may in the future provide, various investment
banking, commercial banking and other financial services for the Company and its subsidiaries for which services they have received,
and may in the future receive, customary fees and commissions.