Fitch gives BBB- to AutoNation, revolver, notes

Fitch Ratings said it assigned a long-term issuer default rating of BBB- to AutoNation, Inc.

The agency also assigned a BBB- rating to the company's senior unsecured revolver and notes, and an F3 short-term issuer default rating to the $1 billion CP program.

The outlook is stable.

Fitch said the ratings reflect AutoNation's steady operating margins over the last few years and positive FCF generation, along with its reasonable credit metrics within the cyclical automotive retail industry.

“Fitch acknowledges that AutoNation's exposure to cyclical risk could have an adverse impact on both top line and margins, though notes the company's scale and variable cost structure have enabled it to cut costs and maintain adjusted leverage at or below 3.3x over the past 10 years,” the agency explained in a news release.

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