Fitch rates Pendragon bond B+

Fitch Ratings said it assigned Pendragon plc's £175 million 6 7/8% seven-year bond a final B+ rating.

The rating is in line with Pendragon's B+ senior secured rating.

The proceeds of the notes will be used for refinancing existing debt, most of which matures in June 2014 and for general corporate purposes. The notes will constitute direct, secured and unconditional obligations of the issuer, Pendragon, and its guarantor subsidiaries.

The B+ senior secured rating applied to the bond is one notch above Pendragon's issuer default rating.

Fitch said the rating differential reflects its recovery analysis of the company on a going concern basis, using an industry consistent multiple applied to an appropriately stressed EBITDA level, which derived a recovery band of 50% to 70% and a recovery rating of RR3 and lead to a one notch uplift from the issuer default rating.

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