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Sonic Automotive hopes to amend revolver, increasing size by $50 million
By Sara Rosenberg
New York, Aug. 5 - Sonic Automotive Inc. is looking to increase its $500 million revolver to $550 million through an amendment to its credit agreement, a company spokesman told Prospect News on Tuesday. Ford Motor Credit Co. is the lead agent with DaimlerChrysler Services North America, LLC, Toyota Motor Credit Corp. and Bank of America participating in the lending group.
In order to gain this extra availability, some new lenders may be added into the credit agreement, the spokesman said.
None of the other terms of the facility are expected to change.
The amendment is expected to be completed within the next month or two. Completing the recently announced bond offering is currently the main focus but once the note sale wraps up, the company will work on the amendment.
Sonic Automotive plans to repay part of the outstanding debt under its revolver with proceeds from the $200 million senior subordinated notes offering. Furthermore, proceeds will also be used to redeem in full the Charlotte, N.C. automotive retailer's outstanding 11% senior subordinated notes. The transaction is expected to close in mid-August.
Gaining an additional $50 million of availability and completing the bond offering are all a part of the company's analysis of its capital structure, the spokesman said, explaining that Sonic is looking at a long-term picture. The larger revolver is anticipated to provide the company with adequate liquidity to fund any future acquisitions or corporate needs, he added.
In February, the company amended its revolver, extending the expiration date to Oct. 31, 2006 from Oct. 31, 2004, reducing the facility to $500 million from $600 million to minimize unused commitment fees and adding Bank of America to the lending group.
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