AutoZone describes itself as a leading retailer and distributor of automotive replacement parts and accessories in the Americas, with 6,863 U.S. stores as of August 29, 2026. We track 26 active AutoZone listings (live count). Per our tenant ratings database, AutoZone, Inc. is rated BBB/Baa1 (S&P / Moody’s); measured against the investment grade threshold of BBB-/Baa3, the database classifies it as investment grade. That company stands behind a lease only when AutoZone, Inc. is the tenant or guarantor, so confirm both in the lease.
On July 7, 2026, AutoZone priced $850 million of 4.950% senior notes due 2031 to yield 4.971%, according to its SEC term sheet. The live median asking cap rate on the AutoZone listings we track is 5.30%. As a mixed-date illustration only, the median of 5.30% as of October 8, 2026 was about 33 basis points above the July 7 issuance yield; that is not a spread observed on a single date.
Bond yields have risen since the notes priced: the ICE BofA BBB US Corporate Index effective yield climbed from 5.44% on July 7 to 6.19% on October 1, 2026 (FRED series BAMLC0A4CBBBEY). As a conditional calculation, if AutoZone’s notes had moved with that index, they would have yielded roughly 5.72% on October 1, 2026, about 42 basis points above the October 8 median asking cap rate. The index covers many issuers and is not a quote for these notes; check current bond quotes before comparing.
For the full multi-company comparison, see the bond-to-NNN spread analysis. For the complete AutoZone tenant analysis, see the AutoZone Credit Rating and NNN Cap Rate page.
AutoZone Credit Profile
| Metric | Details |
|---|---|
| S&P Rating | BBB |
| Moody’s Rating | Baa1 |
| Rating Sources | AutoZone’s final term sheet dated July 7, 2026, filed with the SEC, lists ratings of Baa1 / BBB / BBB for its 4.950% senior notes due 2031, and its prospectus supplement defines Fitch, Moody’s and S&P as the rating agencies for those notes. These are ratings of senior unsecured notes as of that date, not confirmed issuer ratings or outlooks; confirm current ratings with the agencies. |
| Rating Category | Investment Grade |
| Ticker | NYSE: AZO |
| US Store Count | 6,863 (Aug. 29, 2026) |
| Annual Net Sales | $20.3 billion (fiscal 2026) |
| Total Debt | ~$9.1 billion (Aug. 29, 2026) |
The Spread: AutoZone Bonds vs. NNN
| Metric | AZO Corporate Bond | AZO NNN Property |
|---|---|---|
| Yield / Cap Rate | 4.971% at pricing (July 7, 2026); roughly 5.72% if it had tracked the BBB index to Oct. 1, 2026 (an estimate, not a quote) | 5.30% median asking cap rate (live) |
| Nominal Spread vs. Bond | Baseline | Mixed-date illustration as of Oct. 8, 2026: about 33 bps above the yield at pricing and about 42 bps below the Oct. 1 index-adjusted estimate, using the 5.30% median asking cap rate on that date |
| Investment Size | $2,000 minimum denomination, then $1,000 increments (this issue) | Whole property; middle half of asking prices is $1.34M to $2.37M (live; as of October 8, 2026, each of the 28 AutoZone listings we track stated an asking price) |
| Liquidity | Tradable on business days through a broker; individual issues can trade thinly | Weeks to months to sell; timing varies with the lease and market |
| Income Taxation | Ordinary income (up to ~45.8% combined in our model) | Partly sheltered by building depreciation when the investor owns the building (land is not depreciable) |
| 1031 Exchange Eligible | No (only real property qualifies under IRC Section 1031(a)(1)) | Can qualify if held for investment or business use and the exchange rules are met |
| Depreciation Deduction | None | Building basis depreciated straight line over 39 years; a cost segregation study can reallocate part of that basis to shorter-lived property; an investor who owns only the land has no building to depreciate |
| Appreciation Potential | Repays par at maturity unless the issuer defaults; AutoZone may redeem the notes early at its option (before the June 15, 2031 par call date at the greater of par or a make-whole price, and at par after it) | Real estate value can rise or fall |
| Lease Structure | N/A (debt instrument) | Varies by listing (NN, NN+, NNN or absolute NNN; fee simple or ground lease); confirm the lease type, tenant entity and guaranty |
Bond yield at pricing for AutoZone’s 4.950% senior notes due 2031 (July 7, 2026) is from AutoZone’s SEC term sheet. The index-adjusted estimate adds the 0.75 percentage point rise in the ICE BofA BBB US Corporate Index effective yield from July 7 to October 1, 2026 (FRED series BAMLC0A4CBBBEY); it is an estimate, not a quote, and secondary market yields change daily. Listing figures marked live are asking figures across the active AutoZone listings InvestmentGrade.com tracks and refresh with our weekly listings update; spread figures dated October 8, 2026 use the median on that date. Asking cap rates are not closing cap rates.
Tax rows are general information, not tax advice, and assume a U.S. individual investor. The ~45.8% combined rate assumes the 37% top federal rate (IRC Section 1(j)), the 3.8% net investment income tax where it applies (IRC Section 1411), and about 5% state tax as a model assumption; actual rates vary. Nonresidential buildings are depreciated straight line over 39 years (IRC Section 168(b)(3) and (c)); land is not depreciable (Treas. Reg. 1.167(a)-2). On a taxable sale, unrecaptured section 1250 gain (generally the gain attributable to straight-line depreciation on the building) is taxed at a maximum federal rate of 25% (IRC Section 1(h)(1)(E) and (h)(6)), and other taxes, such as the net investment income tax and state tax, can apply. Cost segregation reallocates part of the building basis to shorter-lived property rather than adding deductions, and depreciation on components reclassified as personal property can be recaptured as ordinary income on a taxable sale (IRC Section 1245(a)). Only real property held for productive use in a trade or business or for investment qualifies for a 1031 exchange (IRC Section 1031(a)(1)), and the identification and timing rules of IRC Section 1031(a)(3) must be met. This is not investment advice.
The AutoZone Investment Case
AutoZone, Inc. is rated BBB/Baa1 per our ratings database. Diluted earnings per share rose each year from fiscal 2021 ($95.19) to fiscal 2024 ($149.55), fell 3.1% in fiscal 2025 to $144.87, then rose 5.3% to $152.55 in fiscal 2026. The company returns cash through share repurchases ($2.0 billion in fiscal 2026) while holding adjusted debt to EBITDAR at 2.5x, and it says it targets its capital structure to maintain its investment grade credit ratings.
Customers often arrive with an immediate problem (a vehicle that needs a repair) and need a specific part the same day, which shipping cannot always match. AutoZone’s network of 6,863 US stores is supported by hub and mega hub stores with expanded assortments, which the company says improve local parts availability.
For bond investors evaluating this credit, the NNN comparison is straightforward but not identical. AutoZone had about $9.1 billion of total debt at fiscal 2026 year-end, and the same company stands behind leases that AutoZone, Inc. signs or guarantees. The underlying credit is the same company only when AutoZone, Inc. is the tenant or guarantor, and the claims differ: a bondholder is an unsecured creditor for the full principal, while a landlord owns the real estate but has a claim for future rent after a lease rejection in bankruptcy that is capped under Section 502(b)(6) of the Bankruptcy Code. The NNN investor often seeks a higher yield as compensation for illiquidity, single-asset risk, and re-leasing risk. Whether a given listing offers one depends on its cap rate and on current bond yields: in the dated conditional calculation above, the October 8, 2026 median asking cap rate was below the index-adjusted estimate for AutoZone’s notes, while a listing priced above that estimate would show a premium. The bond investor gives up any such premium for tradability.
AutoZone vs. O’Reilly: Bonds and Cap Rates Compared
Per our ratings database, O’Reilly Automotive, Inc., which operates O’Reilly Auto Parts, is rated BBB/Baa1. The two companies’ recent bonds due 2031 priced close together: AutoZone’s 4.950% notes at 4.971% on July 7, 2026, and O’Reilly’s 5.050% notes at 5.055% on August 10, 2026. If each note had moved with the ICE BofA BBB index through October 1, 2026 (FRED series BAMLC0A4CBBBEY), AutoZone’s would have yielded roughly 5.72% and O’Reilly’s roughly 5.65%, estimates rather than quotes. The live median asking cap rate in the listings we track is 5.30% for AutoZone and 6.00% for O’Reilly. As a dated conditional calculation using the October 8, 2026 medians (5.30% for AutoZone and 6.00% for O’Reilly), the median AutoZone listing was about 42 basis points below its index-adjusted bond estimate and the median O’Reilly listing about 35 basis points above its own; that is arithmetic on an index scenario, not an observed market spread. Some AutoZone listings are ground leases, and we had not identified any among the O’Reilly listings we track as of October 8, 2026, so compare like lease structures.
Holding both AutoZone and O’Reilly spreads tenant exposure across two companies, though both depend on demand for auto parts. With bond yields up since summer, the premium of a given listing over each company’s 2031 notes may be thin or negative, so lease term, rent growth, residual land value, and 1031 eligibility need underwriting property by property.
AutoZone’s 4.950% notes due 2031 priced to yield 4.971% on July 7, 2026. As a mixed-date illustration, the median asking cap rate on the active AutoZone listings we track was 5.30% as of October 8, 2026, about 33 basis points above that issuance yield. Corporate yields have risen since: if the notes had tracked the ICE BofA BBB index to October 1, 2026, they would have yielded roughly 5.72%, about 42 basis points above that median; that is a conditional estimate, not a quote. Check current bond quotes before comparing. After tax, as general information, the comparison depends on structure: an owner of the building can shelter part of the income with building depreciation, while an investor who owns only the land under a ground lease has no building to depreciate.
Per our ratings database, AutoZone, Inc. is rated BBB/Baa1. The company says it targets its capital structure to maintain its investment grade credit ratings; it repurchased $2.0 billion of stock in fiscal 2026 and ended the year with adjusted debt to EBITDAR of 2.5x. Rating agencies publish their own rationales, which this page does not restate; the rating sources we rely on are listed in the credit profile above.
We track 26 active AutoZone listings (live count). A listing count shows supply, not completed sales, so it does not measure how quickly a property will sell. A recognizable brand, the BBB/Baa1 rating of AutoZone, Inc. where it is the tenant or guarantor, a standardized building format, and a middle half of asking prices between $1.34M and $2.37M (live) can draw individual, family office, and 1031 exchange buyers. Time to sell varies with the lease, the location, and market conditions.
Benchmark AutoZone Against the Auto-Parts Tenant Set
AutoZone belongs in the same 1031 replacement-property screen as O’Reilly and NAPA / Genuine Parts, but the right buy depends on more than the sign on the building. Compare cap rate, remaining lease term, rent bumps, store format, and guarantor strength against current 2026 NNN cap rates by tenant credit quality before deciding whether the spread over AutoZone bonds is worth the real estate execution risk.
1031 next reads: best investment-grade NNN tenants for 1031 buyers | AutoZone credit rating and NNN cap rate | bond-vs-NNN spread framework
1031 Buyer Shortcut: AutoZone
For a 45-day identification list, compare AutoZone with other auto parts tenants as well as with other credit tenants. Screen it against investment-grade NNN tenant selection for 1031 buyers and the current 2026 NNN cap-rate framework; then use O’Reilly and NAPA / Genuine Parts as adjacent pricing checks.
Considering AutoZone NNN?
We source AutoZone NNN properties nationally. On the majority of transactions, there is no separate fee to you as the buyer.
Find It: AutoZone NNN nationally, with the tenant entity and any guaranty confirmed.
Fund It: financing matched to the tenant’s credit and the remaining lease term.
Exit It: buyers for AutoZone properties, including 1031 exchange buyers.
Exchange It: 1031 exchange into AutoZone NNN with deadline-driven execution.
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