S&P: Sonic Automotive debt B+

Standard & Poor's said it assigned its B+ issue rating to Sonic Automotive Inc.'s proposed $200 million senior subordinated debt offering.

The agency said it assigned this debt a recovery rating of 5, reflecting an expectation that lenders would receive modest recovery of principal in a default.

At the same time, the agency said it raised the issue rating on the company's outstanding $210 million, 9% senior subordinated notes due 2018 to B+ from B and revised the recovery rating to 5 from 6.

S&P said the rating revision results from its expectation that the company will redeem its convertible senior notes due 2029 with proceeds from the offering, thereby increasing likely recovery for the subordinated lenders.

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