Moody's drops Group 1

Moody's Investors Service said it downgraded Group 1 Automotive's corporate family rating to B1 from Ba3.

The outlook is negative.

These actions conclude the review for possible downgrade initiated on Nov. 19, the agency said, adding that the downgrade considers Group 1s weak operating performance, which when combined with increased debt from 2007's acquisitions and share repurchases, results in credit metrics that are no longer consistent with a Ba3 rating.

For the year ended Dec. 31, due to reductions in EBITDA, leverage as measured by debt/EBITDA increased materially to 6.4 times, and remains at the weak end of the new B1 rating category, Moody's added.

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