[8-K] La-Z-Boy Incorporated Reports Material Event

Rhea-AI Filing Summary

Morgan Stanley Finance LLC (ticker: MS) has filed Amendment No. 1 to Pricing Supplement No. 8,667 for a $440,000 follow-on issuance of Dual Directional Buffered PLUS notes (CUSIP 61778KD61) that will be consolidated with the original $310,000 tranche, bringing the total outstanding to $750,000. The five-year structured notes, due 28 Jun 2030, are unsecured and fully guaranteed by Morgan Stanley.

Key economic terms

• Issue price: $1,000; minimum denomination $1,000.
• Estimated value on pricing date: $943.80 (reflecting structuring & hedging costs).
• Underlying indices: DJIA (INDU 42,982.43), Nasdaq-100 (NDX 22,237.74) and Russell 2000 (RTY 2,136.185).
• Leverage factor: 140% on any positive performance of the worst-performing index.
• Absolute return participation: 100% of any decline up to 20%, effectively capping gain from this feature at 20%.
• Buffer: 20% downside protection; losses begin once the worst performing index falls below 80% of its initial level.
• Minimum maturity payment: 20% of principal.
• No periodic coupons; payment occurs only at maturity.

Cash-flow profile

• Upside scenario: final level > initial level → principal plus 1.4× index appreciation.
• Moderate downside: final level between 80% and 100% of initial → principal plus up to 20% gain.
• Severe downside: final level < 80% of initial → 1:1 loss beyond buffer, floor at 20% of principal.

Placement economics: Investors pay a 3.5% sales commission ($35 per note); net proceeds to Morgan Stanley are $965 per note. The notes will not be listed, and secondary liquidity depends solely on MS & Co., which may discontinue market making at any time.

Risk highlights

• Principal at risk; no interim interest.
• Performance driven solely by the worst performing index, eliminating diversification benefits.
• Credit exposure to Morgan Stanley; notes rank pari passu with other unsecured obligations.
• Estimated value below issue price indicates negative carry at inception.
• Tax treatment uncertain; counsel views notes as prepaid financial contracts, but IRS may disagree.

Strategic context: At $0.75 million aggregate size, the issuance is immaterial to Morgan Stanley’s capital structure but offers the bank low-cost funding while transferring market risk to investors.

Positive

• 140% upside leverage enhances returns when all indices appreciate.
• 20% downside buffer and minimum 20% maturity payout provide partial principal protection.
• Absolute return participation allows positive return in a flat-to-moderately down market.
• Fully guaranteed by Morgan Stanley, a large investment-grade issuer.

Negative

• Principal at risk beyond 20% buffer; losses can reach 80% of invested amount.
• Performance tied to worst-performing index, nullifying diversification benefits.
• Estimated value ($943.80) below issue price implies negative carry from day one.
• No periodic coupons; investors forgo income for five years.
• Unlisted, dealer-driven secondary market may result in illiquidity and wide spreads.
• Exposure to Morgan Stanley credit risk; notes are unsecured obligations.

Insights

Structured Products Analyst

TL;DR – High-risk, niche note offers 140% upside leverage with 20% buffer and minimum 20% payout, but principal is unsecured and illiquid.

The amended 424B2 adds $440k to an existing tranche, keeping economic terms intact. Investors gain an attractive 1.4× upside and a limited absolute-return feature, but face three headwinds: (1) real economic value starts at $943.80—3 points below par; (2) downside kicks in once any one index breaches an 20% drawdown, nullifying diversification; and (3) secondary liquidity is dealer-driven, exposing holders to wide bid–ask spreads. From Morgan Stanley’s standpoint, the deal provides cheap fixed-rate funding and fee income. Impact on MS equity is negligible, so I rate it 0 (Neutral).

Risk Analyst

TL;DR – Note concentrates risk on worst index; buffer & floor mitigate only first 20% loss—investors could lose up to 80% of principal.

Credit risk is paramount: as an MSFL obligation, recovery hinges solely on Morgan Stanley’s guarantee. Market risk is amplified by linking payout to the lowest-performing of three volatile benchmarks, including small-cap Russell 2000. While the 20% buffer appears protective, historical data show multiple 30%+ one-year drawdowns in all three indices. Liquidity risk is also material; the $750k total size limits aftermarket depth. Given the potential for substantial capital loss relative to capped upside, I assign a -1 (Negative) impact rating for prospective note investors (though not for MS shareholders).

0000057131False00000571312025-07-022025-07-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

			Date of Report (Date of earliest event reported):						July 1, 2025
LA-Z-BOY INCORPORATED
(Exact name of registrant as specified in its charter)

Michigan

1-9656

38-0751137

(State or other jurisdiction of

(Commission

(IRS Employer

incorporation)

File Number)

Identification No.)

One La-Z-Boy Drive,

Monroe,

Michigan

48162-5138

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code (734) 242-1444

N/A

      (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

LZB

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐                                                         

Item 1.01 Entry into a Material Definitive Agreement.

On July 1, 2025, La-Z-Boy Incorporated (the “Company”), entered into the Second Amendment to Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things, (i) extends the maturity date of the Credit Facility (as defined below) from October 15, 2026 to July 1, 2030, (ii) increases the accordion basket for additional incremental loans (subject to certain conditions) from $100 million to $125 million, (iii) removes the SOFR credit spread adjustment, and (iv) decreases the consolidated fixed charge coverage ratio required to be satisfied under the Company’s financial covenant from 1.75 to 1.00 to 1.50 to 1.00.

The Credit Agreement Amendment amends that certain Credit Agreement, dated October 15, 2021, as amended, with Wells Fargo Bank, National Association, as administrative agent, the other agents and lenders named therein and the other parties thereto (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $200 million, which includes a $50 million letter of credit sub-limit.

The foregoing description of the Credit Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement Amendment, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference. Capitalized terms not defined herein shall have the meanings assigned to them in the Credit Agreement Amendment.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 is incorporated herein by reference.

Item 9.01  Financial Statements and Exhibits.

    (d)        The following exhibits are furnished as part of this report:

Description
4.1						Second Amendment to Credit Agreement dated as of July 1, 2025, among La-Z-Boy Incorporated, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LA-Z-BOY INCORPORATED

(Registrant)

Date: July 2, 2025

BY: /s/ Jennifer L. McCurry

Jennifer L. McCurry
Vice President, Corporate Controller and Chief Accounting Officer

FAQ

What indices underlie Morgan Stanley’s Dual Directional Buffered PLUS (MS)?

The note references the Dow Jones Industrial Average, Nasdaq-100, and Russell 2000; payout depends on the worst performer.

How much upside can investors earn on the MS Buffered PLUS notes?

If the worst index rises, investors receive 140% of that gain with no cap; if it falls ≤20%, gains are capped at 20%.

What is the downside protection and floor for the MS 424B2 notes?

There is a 20% buffer; beyond that investors lose 1% per 1% decline, but payment will not fall below 20% of principal.

Why is the estimated value ($943.80) below the $1,000 issue price?

The gap reflects structuring, hedging, distribution costs and the issuer’s lower internal funding rate.

Are the notes liquid and exchange-traded?

No; they are unlisted. Liquidity depends solely on MS & Co. making a market, which it may discontinue.

What are the key tax considerations for non-U.S. holders?

Counsel believes Section 871(m) should not apply before 2027, but the IRS could disagree; investors should seek tax advice.