S&P: AutoNation notes BBB-

Standard & Poor’s said it assigned a BBB- rating to AutoNation Inc.’s proposed $750 million senior unsecured notes, $300 million of which will mature in 2021 and $450 million in 2025.

The proceeds will be used to reduce borrowings under the company’s revolving credit facility.

The debt issuance will have no significant impact on the company’s financial metrics, S&P said, but its financial flexibility will be improved by increasing availability under its revolver and extending the duration of maturities.

The proposed senior notes will rank equally with all existing and future senior unsecured debt and will be senior to all of the future subordinated debt issued by the company, the agency said.

The ratings reflect the company’s consistent free cash flow generation and adequate liquidity, S&P said.

The company’s business model is considered resilient due to its high degree of variable costs and multiple revenue sources, the agency added.

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