S&P rates Group 1 notes BB

Standard & Poor’s said it assigned a BB rating and 5 recovery rating to Group 1 Automotive Inc.’s proposed $250 million senior unsecured notes due 2024.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The proceeds will be used from this issuance to repay $138.2 million outstanding under the acquisition line of its revolving credit facility and for general corporate purposes, S&P said.

The proposed debt issuance increases debt leverage and interest expense, the agency said. But, the agency said it believes Group 1 will pursue a neutral financial policy that balances business expansion and shareholder returns with lease-adjusted leverage appropriate for the rating.

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