Moody’s upgrades Group 1, notes

Moody's Investors Service said it upgraded all ratings of Group 1 Automotive, Inc., including the corporate family rating to Ba1 from Ba2, probability of default rating to Ba1-PD from Ba2-PD and senior unsecured notes to Ba2 (LGD6) from rating under review B1 (LGD6).

The outlook is stable.

This concludes the review for upgrade initiated on June 16.

"The upgrade largely reflects the reduction in adjusted debt due to changes in Moody's approach for capitalizing operating leases," Moody's vice president Charlie O'Shea said in a news release.

"As a result of this change, Group 1's leverage has improved to around 4 times from around 4.7 times under the prior methodology. In addition, Group1's operating performance continues to benefit from positive macroeconomic conditions for auto sales in the U.S. and U.K., and Brazil is beginning to generate positive traction."

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