RICHMOND, Va. -

Contained within its latest update to the Securities and Exchange Commission, CarMax shared details of a new unsecured revolving credit facility with Bank of America.

Officials said CarMax, CarMax Auto Superstores and certain other subsidiaries of the company terminated the previous credit agreement with Bank of America, the lender and administrative agent. The event came in accordance with its terms and was paid in full, and CarMax indicated no penalties in connection with terminating the previous credit agreement that had been scheduled to end on Dec. 8.

Replacing that contract is CarMax’s agreement with Bank of America that provides for aggregate borrowings of up to $700 million. The company has the option to increase the aggregate commitment by up to $300 million provided that it obtains a written consent for the increase from each lender that is participating in the increase.

Officials noted borrowings under this new agreement are available for working capital and general corporate purposes and may be in the form of syndicated loans, swing line loans, new vehicle swing line loans or letters of credit. All outstanding principal amounts borrowed under the agreement will be due and payable on Aug. 26, 2016.

CarMax acknowledged the borrowings under this new agreement are guaranteed by the company and certain of its subsidiaries.

The company pointed out it may elect interest rates on its revolving borrowings calculated by reference to one month LIBOR plus a margin based on the company’s consolidated leverage ratio. Or the choice may reference to Bank of America’s prime rate or, if greater, the Federal Funds rate plus 0.50 percent, or a rate based on one month LIBOR plus 1.00 percent plus a margin based on the company’s consolidated leverage ratio.

“The new credit agreement contains customary representations and warranties, conditions and affirmative and negative covenants, including requirements for maintaining certain financial ratios,” CarMax officials explained.

“The agreement contains events of default that include, among others and subject to customary cure periods, non-payment of principal, interest or fees, violation of covenants, material inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to material indebtedness and events constituting a change of control,” they continued.

“In the event of a default by the company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the agreement immediately due and payable, terminate the lenders’ commitments to make loans under the agreement, and enforce any and all rights of the lenders or the administrative agent under the Agreement and related documents,” CarMax officials went on to state.

“For certain events of default related to insolvency and receivership, the commitments of the lenders will be automatically terminated and all outstanding obligations of the company will become immediately due and payable,” they concluded.