Moody's: Capital Automotive outlook stable

Moody's Investors Service said it affirmed the Ba3 senior secured and corporate family ratings of Capital Automotive LLC and revised the outlook to stable from negative.

The outlook revision reflects Moody's belief that the negative trends and uncertainty in the U.S. auto industry have let up for the time being. In addition, Capital Automotive retains a number of important strengths, in Moody's view, including consistently high occupancy, solid rent coverage and good portfolio diversity.

Nonetheless, the agency said Capital Automotive remains a highly levered company with limited liquidity. Capital Automotive's high leverage (about 9.6 times net debt/EBITDA), consisting almost entirely of secured debt, and the commensurate lack of unencumbered assets remain substantial credit concerns to Moody's. The agency is also concerned that the issuer has very limited financial flexibility and limited access to public equity and senior unsecured debt, and Moody's predicted that asset sales will likely be required to meet near-term liquidity needs.

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