S&P rates United Auto Group convertibles B

Standard & Poor's said it assigned a B rating to United Auto Group Inc.'s proposed $250 million subordinated convertible notes due 2026 and affirmed the company's BB- corporate credit rating.

The outlook is stable.

Proceeds will be used to repay borrowings under the company's revolving credit facility and to repurchase up to 500,000 (about $20 million) of the company's shares. The debt issue will allow the company to extend debt maturities and to lower its borrowing costs, the agency said.

The ratings reflect the company's aggressive financial policy, its highly leveraged balance sheet and the challenges of the cyclical and competitive automotive retail industry.

S&P said these risks more than offset United Auto Group's position as one of the largest players in the domestic industry, its developing international presence and its rich mix of brands showing greater-than-average growth.

The company's ratio of debt to EBITDA is about 4.7x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.