Moody's assigns Asbury notes B1

Moody's Investors Service said it assigned a B1 rating to Asbury Automotive Group, Inc.'s proposed new senior unsecured notes. Other ratings are unaffected including the company's Ba2 corporate family rating, the Ba2-PD probability of default rating and the B1 rating on the existing senior subordinated notes. The speculative grade liquidity rating remains unchanged at SGL-2. The outlook is stable.

Proceeds of $1.125 billion of senior unsecured notes along with cash on hand and other borrowings under the company's existing floorplan facilities will be used to fund its planned roughly $1 billion acquisition of Park Place Motorcars as well as to repay the $600 million senior subordinated notes and pay related fees.

“Though pro forma leverage will exceed 4.5x, 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,” stated Charlie O'Shea, a Moody's vice president, in a press release.

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