S&P rates Group 1 notes BB+

S&P said it assigned a BB+ issue-level rating and 4 recovery rating to Group 1 Automotive Inc.'s proposed $550 million of senior unsecured notes due 2028. The 4 recovery rating indicates S&P’s expectation for average recovery (30%-50%; rounded estimate: 45%) in the event of a default.

The company will use the proceeds to pay down its $550 million of 5% notes due 2022 in a leverage-neutral transaction, which will potentially reduce its interest costs, S&P said.

The outlook is negative.

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