AutoZone, Inc. $200 Million 6.95% Senior Notes Terms Agreement with Underwriters (June 2006)

Contract Categories: Business Finance › Underwriting Agreements
Summary

AutoZone, Inc. has entered into an agreement with several underwriters, including J.P. Morgan Securities Inc. and Merrill Lynch, to issue and sell $200 million in senior unsecured notes due in 2016. The notes carry a 6.95% annual interest rate, with interest paid semi-annually. The agreement outlines the purchase price, redemption terms, and other key conditions. The underwriters agree to buy the notes at a set price and resell them to investors. The agreement is effective upon acceptance by AutoZone and is governed by the terms of a referenced Underwriting Agreement.

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EX-1.2 3 g02027exv1w2.txt EX-1.2 TERMS AGREEMENT 06/08/06 EXHIBIT 1.2 EXECUTION VERSION AUTOZONE, INC. (A NEVADA CORPORATION) DEBT SECURITIES TERMS AGREEMENT June 8, 2006 To: AutoZone, Inc. 123 South Front Street Memphis, Tennessee 38103 Ladies and Gentlemen: We understand that Auto Zone, Inc., a Nevada corporation (the "Company"), proposes to issue and sell $200,000,000 aggregate principal amount of its senior debt securities (the "Underwritten Securities"). Each provision of the Underwriting Agreement dated June 8, 2006 among the Company, J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated is hereby incorporated by reference herein in its entirety and shall be deemed to be a part of this Terms Agreement to the same extent as if such provision had been set forth in full herein. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the "Underwriters") offer to purchase , severally and not jointly, the principal amount of Underwritten Securities opposite their names set forth below at the purchase price set forth below.
Principal Amount of Underwriters Underwritten Securities - --------------------------------------------------------------------------------------------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated.......................... $ 60,000,000 J.P. Morgan Securities Inc. ................................................ $ 60,000,000 Banc of America Securities LLC.............................................. $ 10,000,000 Citigroup Global Markets Inc. .............................................. $ 10,000,000 SunTrust Capital Markets, Inc. ............................................. $ 10,000,000 Wachovia Capital Markets, LLC .............................................. $ 10,000,000 BNY Capital Markets, Inc.................................................... $ 4,000,000 BNP Paribas Securities Corp. ............................................... $ 4,000,000 Calyon Securities (USA) Inc................................................. $ 4,000,000 Comerica Securities, Inc.................................................... $ 4,000,000 Fifth Third Securities, Inc................................................. $ 4,000,000 First Tennessee Securities Corp............................................. $ 4,000,000 Keybanc Capital Markets, a Division of McDonald Investments Inc............. $ 4,000,000 Morgan Keegan & Company, Inc................................................ $ 4,000,000 NatCity Investments, Inc.................................................... $ 4,000,000 Piper Jaffray & Co.......................................................... $ 4,000,000 ------------ Total $200,000,000 ============
The Underwritten Securities shall have the following terms: Title: 6.95% Senior Notes due 2016. Ranking: Senior Unsecured. Ratings: BBB+ (S&P) / Baa2 (Moody's). Aggregate principal amount: $200,000,000. Denominations: Integral Multiples of $1,000 Currency of payment: U.S. Dollars. Interest rate or formula: 6.95% per annum. Interest payment dates: Semi-annually on each June 15 and December 15, commencing on December 15, 2006 Regular record dates: June 1 and December 1. Stated maturity date: June 15, 2016. Redemption provisions: At any time, in whole or in part, at a make-whole call equal to the greater of (i) 100% of the principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest discounted to the redemption date, on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months), at a rate equal to the Adjusted Treasury Rate plus 35 basis points, as determined in good faith by the Company. Sinking fund requirements: None. Conversion provisions: None. Listing requirements: None. Restriction on sale of Underwritten Securities: Until the Closing Time in accordance with Section 3(j) of the Underwriting Agreement. Type of offering: Fixed price offering Initial public offering price per Underwritten Security: 99.658% of the principal amount, plus accrued interest, if any, from June 13, 2006.
Purchase price per Underwritten Security payable by Underwriters: 99.008% of principal amount, plus accrued interest, if any, from June 13, 2006. The selling concession shall be 0.200% and the reallowance concession shall be 0.200%, in each case of the principal amount of the Underwritten Securities. Form: One registered note in global form. Closing Time and location: 10:00 A.M. (New York City time), on June 13, 2006, at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York, 10022. Applicable Time: 3:30 p.m. (Eastern time) on June 8, 2006 or such time as agreed by the Company and the Representatives. Final Term Sheet: Attached as Annex I.
Please accept this offer no later than 5:00 P.M. (New York City time) on June 8, 2006 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, J.P. MORGAN SECURITIES INC. By: /s/ Robert Bottamedi ----------------------------------- Name: Robert Bottamedi Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ Happy Hazelton ----------------------------------- Name: Happy Hazelton Title: Vice President Acting on behalf of themselves and the other named Underwriters. Accepted: AUTOZONE, INC. By: /s/ Charlie Pleas III --------------------------------- Name: Charlie Pleas III Title: Vice President and Controller By: /s/ Harry L. Goldsmith --------------------------------- Name: Harry L. Goldsmith Title: Executive Vice President, General Counsel and Secretary