CarMax Business Services via its CarMax Auto Funding yesterday filed an amendment to an S-3 filing it submitted with the Securities and Exchange Commission (SEC).

Under the amendment, CarMax offered to rescind certain notes it sold through its CarMax Auto Owner Trust 2011-1 deal from the holders of the notes who bought them in the firm's March 17 offering.

In the SEC amended filing, CarMax said that after the notes were sold, the company discovered that the registration statement covering the offer and sale of the notes had expired on Feb. 28.

Thus, accordingly, the car company's offer and sale of the notes failed to comply fully with Section 5 of the Securities Act of 1933, as amended, which has triggered a right of rescission under the Securities Act. To address this issue, the company said that is making the rescission offer.

The rescission offer is meant to address federal compliance issues by allowing the holders of the notes that bought the ABS notes from the firm to rescind the underlying securities deals and sell those securities back to the CarMax.

For the free writing prospectus further explaining the reasons for CarMax's recission offer, please click this link.

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