New Issue: Sonic Automotive prices $200 million 7% 10-year notes to yield 7 1/8%

By Paul A. Harris

Portland, Ore., June 25 - Sonic Automotive, Inc. priced a $200 million issue of 7% 10-year senior subordinated notes (B3/B+/) at 99.11 to yield 7 1/8% on Monday, according to a syndicate source.

The yield printed at the tight end of yield talk, which was set in the 7¼% area.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the joint bookrunners for the quick-to-market issue.

The Charlotte, N.C.-based automotive retailer plans to use the proceeds to repurchase some or all of the outstanding 5% convertible senior notes due 2029 and for general corporate purposes.

Issuer:	Sonic Automotive, Inc.
Face amount:	$200 million
Proceeds:	$198.22 million
Maturity:	July 15, 2022
Securities:	Senior subordinated notes
Bookrunners:	Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Wells Fargo Securities LLC
Co-managers:	U.S. Bancorp Investments Inc., Comerica Securities Inc.
Coupon:	7%
Price:	99.11
Yield:	7 1/8%
Spread:	552 bps
Call features:	Make-whole call until July 15, 2017, then callable at 103.5, 102.333, 101.167, par on and after July 15, 2020
Equity clawback:	35% at 107 until July 15, 2015
Trade date:	June 25
Settlement date:	July 2
Ratings:	Moody's: B3
	Standard & Poor's: B+
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	7¼% area
Marketing:	Quick to market

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