S&P gives Cobra Acquisition B

S&P said it assigned its B long-term issuer credit rating to Cobra AcquisitionCo LLC and its B- debt rating to its planned issuance of $400 million of senior unsecured notes due 2029.

“Cobra AcquisitionCo LLC is an indirect holding company for Exeter Finance LLC. The ratings reflect Exeter's concentration in non-prime auto lending, significantly encumbered balance sheet, reliance on non-prime ABS markets, and relatively high leverage. The ratings also reflect the company's improving profitability and its strong niche in the fragmented used vehicle sales market,” the agency said in a press release.

Cobra plans to use the proceeds to pay down the $175 million of unsecured notes and a portion of the Warburg Pincus acquisition.

The outlook is stable, reflecting the forecast that Exeter will operate with leverage of 5x-6x debt to adjusted total equity on a GAAP basis, over the next 12 months, S&P said.

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