Moody's rates AutoNation loan Ba2

Moody's Investors Service said it assigned a Ba2 rating to AutoNation Inc.'s new $200 million senior secured credit facility due 2005 and affirmed the company's existing ratings.

Moody's also affirmed the company's $300 million senior secured credit facility due 2006 at Ba2, $450 million senior unsecured notes due 2008 at Ba2, senior implied rating at Ba1, senior unsecured issuer rating at Ba3, and speculative grade liquidity rating of SGL-2.

The outlook remains positive.

There are no outstanding borrowings under the new $200 million senior secured credit facility or the $300 million senior secured credit facility. Moody's does not rate the company's $3.9 billion floorplan facility ($3.2 billion outstanding as of June 30) or the company's $400 million mortgage facility ($324 million outstanding as of June 30).

Moody's said the ratings reflect the competitive, fragmented and low margin nature of the auto retailing business, and the dependence of new car sales on general economic conditions and the level of auto manufacturer incentives. The ratings are supported by expectations that AutoNation will sustain the level of operational improvements seen over the last few years and continue to maintain industry leading margins.

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