Moody's changes Penske view to negative

Moody's Investors Service said it affirmed all ratings of Penske Automotive Group, Inc. but changed the outlook to negative from stable. The SGL-2 speculative grade liquidity rating is unchanged.

"The outlook change to negative considers the potential for deterioration in Penske's credit metrics due to the various coronavirus containment measures," stated Charlie O'Shea, a Moody's vice president, in a press release.

"Heading into 2020, Penske's metrics were already weakly positioned relative to the downward rating triggers with EBIT/interest of 3.1 times already below the 3.5 times trigger, with Moody's expectation that they would gradually improve during the year, which is now uncertain," continued O'Shea.

"The affirmation recognizes Penske's size, flexible auto dealer operating model, and its diversity outside of auto retail, particularly its sizeable ownership stake of Penske Truck Leasing, and highly-experienced management team," O'Shea said.

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