Moody’s shifts Asbury view to stable

Moody’s Investors Service said it affirmed the ratings of Asbury Automotive Group, Inc., including the Ba2 corporate family rating, and changed the outlook to stable from positive.

“The change in outlook to stable recognizes the impact on Asbury’s quantitative profile of the additional debt that will be necessary for it to complete its planned roughly $1 billion acquisition of Park Place Motorcars, with the result that it is unlikely Asbury will be able to continue its present path towards a potential Ba1 rating within the next 12 months given pro forma leverage will exceed 4.5 times,” said Charlie O’Shea, a Moody’s vice president, in a press release.

“That said, Moody’s views the proposed acquisition favorably even considering the very high multiple and integration risks as it improves Asbury’s position in the lucrative Texas market with premium brands to augment the David McDavid stores, as well as providing it with a key Land Rover/Jaguar open point,” said O’Shea.

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