S&P trims Cox Enterprises view to negative

Standard & Poor’s said it revised the outlook on Cox Enterprises Inc. to negative from stable following its announcement that its subsidiary, Cox Automotive, entered into an agreement to acquire Dealertrack Technologies Inc. for about $4.6 billion.

“We expect the acquisition will initially be funded with a $1.85 billion term loan, about $750 million of common equity from BDT Capital Partners, and the remainder from its $3.5 billion revolving credit facility.

At the same time, S&P affirmed the BBB corporate credit rating and A-2 short-term rating, and all other ratings.

“The outlook revision is based on our expectation that pro forma adjusted debt to EBITDA will be around 3.3x at year-end 2015, above our current 3.0x threshold for the BBB rating, and compared to 2.9x as of March 31, 2015,” said S&P credit analyst Allyn Arden in a news release.

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