On June 16, 2014, American Tire Distributors Inc. (ATD) redeemed $250 million worth of 9.75% Senior Secured Notes. The company paid $263.2 million for the outstanding notes.
ATD paid for the notes -- plus related fees and expenses -- with proceeds from a $335.7 million incremental term loan it took out on the same day. According to the company's filing with the United States Security and Exchange Commission, the remaining proceeds "will be used for working capital requirements and other general corporate purposes, including the financing of potential future acquisitions."
The redemption was not a surprise. One month earlier on May 16, ATD delivered a Notice of Full Redemption, providing for the redemption of all $250 million aggregate principal amount of its 9.75% Senior Secured Notes on Monday, June 16.
ATD's incremental term loan was an amendment to the original term loan entered into in connection with its acquisition of Terry’s Tire Town Holdings Inc. on March 28, 2014. The original credit agreement provided for a senior secured term loan facility in the aggregate principal amount of $300 million.
Pursuant to the incremental amendment, until Aug. 15, 2014, ATD has the right to borrow up to an additional $80 million on the same terms as the existing term loan.
ATD is a subsidiary of American Tire Distributors Holdings Inc., which is owned by TPG Capital LP (Tarrant Capital IP LLC).