CARMAX INC 8-K

What Happened

• CarMax, Inc. announced its first quarter results in a press release dated June 17, 2026 (furnished as Exhibit 99.1 to the 8-K). Separately, on June 15, 2026, CarMax and subsidiary CarMax Auto Superstores, Inc. (CASI) entered a Credit Agreement with MUFG Bank, Ltd. and other lenders for a $500,000,000 term loan facility.
• The $500 million Term Loan Facility matures on June 15, 2029. Proceeds were used to pay down normal-course borrowings under CarMax’s $2.0 billion unsecured revolving credit facility and for general working capital and corporate purposes.

Key Details

• Term loan amount: $500,000,000; maturity date: June 15, 2029.
• Lender/agent: MUFG Bank, Ltd., with other lenders party to the Credit Agreement.
• Uses of proceeds: pay down borrowings under the $2.0 billion unsecured revolver and for working capital/general corporate purposes.
• Covenants and protections: Company and certain subsidiaries guarantee the borrowings; covenants require (1) consolidated net leverage ratio ≤ 3.75:1.00 and (2) consolidated interest and rent coverage ratio ≥ 2.00:1.00 as of each fiscal quarter end; includes customary events of default, cross‑default, change‑of‑control provisions, and automatic acceleration on insolvency.
• Interest: loans bear interest at either a Daily SOFR-based rate plus a margin or a Base Rate plus a margin; Base Rate is the highest of (i) federal funds + 0.5%, (ii) MUFG prime, or (iii) SOFR. Interest generally payable the first business day of each month.

Why It Matters

• The term loan reduces reliance on the company’s revolving credit facility by replacing normal-course revolver borrowings with committed term funding, which can improve near-term liquidity stability.
• The covenant levels set clear financial tests (leverage and coverage) CarMax must meet each quarter; failure could trigger defaults and lender remedies, including acceleration in certain cases.
• Interest is tied to SOFR or a variable Base Rate, so borrowing costs will vary with market rates; investors should monitor interest expense and covenant compliance in upcoming quarterly filings.