AutoNation gives details on $1.7 billion five-year credit facility

By Jennifer Chiou

New York, Dec. 8 - AutoNation, Inc. gave the pricing details of its $1.7 billion credit agreement, consisting of a $500 million term loan facility and a $1.2 billion revolving credit facility, in an 8-K filing with the Securities and Exchange Commission.

Borrowings under the facility will bear interest at Libor plus 175 basis points. The margin will be 125 bps to 200 bps based on the company's consolidated leverage ratio.

The commitment fee is 25 bps to 35 bps.

As reported, the total amount of the credit facility was increased from $1.5 billion.

The filing added that JPMorgan Chase Bank, NA acted as administrative agent with Bank of America, NA as syndication agent. Mizuho Corporate Bank, Ltd., Suntrust Bank, Toyota Motor Credit Corp. and Wells Fargo Securities, LLC are documentation agents. J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., Suntrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC as co-lead arrangers and joint bookrunners.

The new agreement, which terminates on Dec. 7, 2016, replaces the company's existing credit agreement. The previous facility included term loan facilities due 2012 and 2014 and revolving credit facilities due 2012 and 2014.

As already noted, the new facility has a $500 million accordion.

With the new agreement, the company has increased its maximum leverage ratio to 3.75 times from 3.25 times and its maximum capitalization ratio to 65% from 60%, according to the release.

AutoNation is a Fort Lauderdale, Fla.-based automotive retailer.

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