S&P upgrades Sonic Automotive

Standard & Poor's said it raised its ratings on Sonic Automotive Inc., including raising the corporate credit rating to B+ from CCC+.

The ratings were removed from CreditWatch, where they were placed with positive implications on Sept. 16. The outlook is stable.

The agency said the upgrade reflects its opinion that completion of the refinancing of Sonic's secured credit facility, which was set to expire in February, alleviates near-term refinancing risks. It also reflects S&P's belief that Sonic's EBITDA and cash flow generation have begun increasing from their recent lows.

The ratings on Sonic continue to reflect its aggressive financial risk profile, including substantial debt leverage and moderate cash flow protection measures, and a fair business risk profile as one of several large consolidators in the highly competitive U.S. auto retailing industry, S&P said. Leverage for the 12 months ended Sept. 30 was 6.8 times.

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