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Moody's: AutoNation outlook negative
Moody's Investors Service said it affirmed AutoNation, Inc.'s Ba1 corporate family and probability-of-default ratings, downgraded the speculative grade liquidity rating to SGL-2 from SGL-1 and changed the outlook to negative from stable.
The agency also affirmed the $700 million senior unsecured revolver due 2012, $600 million senior unsecured term loan due 2012 and $300 million 7% senior unsecured notes due 2014 at Ba2 (LGD5, 82%), as well as its $300 million floating rate senior unsecured notes due 2013 at Ba2 (LGD5, 82%).
The change in outlook reflects AutoNation's soft operating performance for the past three quarters, which has resulted in deteriorating debt protection measures and a weaker credit profile, according to the agency.
AutoNation's Ba1 rating reflects its position as the largest auto retailer in the United States, its solid liquidity and solid credit metrics, the agency said.
The rating also considers the difficult macroeconomic-driven sales environment, AutoNation's relatively high concentration of domestic vehicles in its sales mix, the agency noted.
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