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Fitch assigns Asbury loan BBB-, notes BB
Fitch Ratings said it gave Asbury Automotive Group, Inc.’s planned $450 million revolver BBB-/RR1 ratings and BB/RR4 ratings to its $850 million unsecured notes maturing 2028 and 2030 and proposed $1.5 billion of unsecured notes maturing 2029 and 2032, which will be used to finance the acquisition of Larry H. Miller Dealerships, Total Care Auto and for additional acquisitions under contract.
Fitch Ratings also assigned a BB first-time issuer default rating to Asbury Automotive.
“Asbury's BB rating reflects its top five position in the new and used auto dealership industry following the proposed acquisitions. The rating is supported by balanced gross profit mix across segments that limits financial sensitivity to the cyclical new and used vehicle market and by strong liquidity. The ratings consider a projected reversal of recently strong gross margin and demand trends,” the agency said in a press release.
The outlook contemplates heightened uncertainty related to increased consumer demand and margins that could reverse beyond Fitch's expectations and limit the company's deleveraging capacity, Fitch said.
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