Published on 11/13/2023 in the Prospect News Investment Grade Daily.
New Issue: O’Reilly Automotive prices $750 million 5.75% senior notes due 2026 at 95 bps spread
By William Gullotti
Buffalo, N.Y., Nov. 13 – O’Reilly Automotive Inc. priced $750 million of 5.75% three-year senior notes (expected: Baa1/BBB) on Monday, according to an FWP filed with the Securities and Exchange Commission.
The notes priced at 99.954 to yield 5.767%, or a spread of 95 basis points over Treasuries.
The notes feature a make-whole call, payable at Treasuries plus 15 bps, followed by a par call. Any change of control will make the notes putable at 101.
BofA Securities, Inc., J.P. Morgan Securities LLC, Truist Securities, Inc., U.S. Bancorp Investments, Inc. and PNC Capital Markets LLC are the joint bookrunning managers.
According to a separate 424B5 filing with the SEC, a portion of the proceeds will be used to repay a portion of the borrowings under the company’s commercial paper program. If any proceeds remain, they will be used for general corporate purposes, which may include working capital, stock repurchases and investments in other business opportunities, including acquisitions and related fees and expenses.
As of Nov. 8, the company had approximately $1.3 billion outstanding under its $1.8 billion commercial paper program, and outstanding commercial paper notes bore interest at a weighted-average interest rate of 5.62% and had maturities of up to 397 days from the date of issue.
The Springfield, Mo.-based company is an aftermarket auto parts retailer.
| Issuer: | O’Reilly Automotive Inc.
|
| Amount: | $750 million
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| Issue: | Senior notes
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| Maturity: | Nov. 20, 2026
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| Bookrunners: | BofA Securities, Inc., J.P. Morgan Securities LLC, Truist Securities, Inc., U.S. Bancorp Investments, Inc. and PNC Capital Markets LLC
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| Senior co-manager: | TD Securities (USA) LLC
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| Co-managers: | Regions Securities LLC, BMO Capital Markets Corp., Huntington Securities, Inc., Capital One Securities, Inc. and Mizuho Securities USA LLC
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| Trustee: | U.S. Bank Trust Co., NA
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| Counsel to issuer: | Skadden, Arps, Slate, Meagher & Flom LLP and Shook, Hardy & Bacon LLP
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| Counsel to underwriters: | Sidley Austin LLP
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| Coupon: | 5.75%
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| Price: | 99.954
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| Yield: | 5.767%
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| Spread: | Treasuries plus 95 bps
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| Call options: | Make-whole call at Treasuries plus 15 bps prior to Oct. 20, 2026; par call after that
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| Put option: | At 101 upon change of control
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| Trade date: | Nov. 13
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| Settlement date: | Nov. 20
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| Expected ratings: | Moody’s: Baa1
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| S&P: BBB
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| Distribution: | SEC registered
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| Cusip: | 67103HAM9
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