AUTOZONE INC 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk At May 9, 2020, the only material changes to our instruments and positions that are sensitive to market risk since the disclosures in our Annual Report on Form 10-K for the year ended August 31, 2019 were the $500 million 3.625% Senior Notes due April 2025 debt issuance, $750 million 4.000% Senior Notes due April 2030 debt issuance, $1.030 billion net decrease in commercial paper and new $750 million 364-Day Credit Agreement. The fair value of our debt was estimated at $5.723 billion as of May 9, 2020 and $5.419 billion as of August 31, 2019, based on the quoted market prices for the same or similar debt issues or on the current rates available to AutoZone for debt of the same terms. Such fair value was greater than the carrying value of debt by $304.9 million at May 9, 2020 and greater than the carrying value by $212.7 million at August 31, 2019. We did not have any variable rate debt outstanding at May 9, 2020 and $1.030 billion of variable rate debt outstanding at August 31, 2019. The primary interest rate exposure on variable rate debt is based on LIBOR. We had outstanding fixed rate debt of $5.418 billion, net of unamortized debt issuance costs of $31.7 million at May 9, 2020 and $4.176 billion, net of unamortized debt issuance costs of $23.7 million at August 31, 2019. A one percentage point increase in interest rates would reduce the fair value of our fixed rate debt by $225.3 million at May 9, 2020. At May 9, 2020, we had two outstanding treasury rate locks that hedge a portion of the risk of change in benchmark interest rates associated with long-term debt we anticipate issuing in the future. See Part 1, Item 1. Financial Statements, Note E – Derivative Financial Instruments to the Condensed Consolidated Financial Statements.