Moody's ups Sonic Auto loan to Ba2

Moody's Investors Service said it upgraded the senior secured credit facility rating of Sonic Automotive, Inc. to Ba2 from Ba3, affirmed other ratings and changed the outlook to stable from negative.

Moody's affirmed Sonic's Ba3 senior implied rating, B1 senior unsecured issuer rating, B2 senior subordinated debt rating and B3 convertible subordinated notes rating.

The upgrade reflects Moody's increased comfort in the expected loss prospects given its priority position in the capital structure and the strong asset collateralization, namely inventory, accounts receivable and certain properties.

Moody's said the change in outlook reflects Sonic's improved operating performance and moderating acquisition activity since the second half of 2004, despite the continuing challenges of having relatively high leverage.

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