AutoNation begins tender offer, consent solicitation for 9% senior notes

By Angela McDaniels

Seattle, March 10 - AutoNation Inc. has begun a cash tender offer for the $323.5 million outstanding of its 9% senior notes due 2008 and a consent solicitation to amend the indenture governing the notes, according to a company news release.

The proposed amendments would eliminate most of the restrictive covenants and events of default contained in the indenture.

The consent solicitation will expire at 5 p.m. ET on March 24, and the tender offer will expire at 10 a.m. ET on April 12, unless either is extended by the company.

AutoNation said the total consideration for each $1,000 principal amount of notes tendered will be calculated based on a fixed spread of 50 basis points over the bid-side yield on the 4 1/8% U.S. Treasury note due Aug. 15, 2008.

The total consideration includes a consent payment equal to $30 per $1,000 principal amount of notes tendered by the consent deadline.

Noteholders who tender will also receive interest accrued up to but not including the payment date.

Completion of the tender offer and consent solicitation is subject to the receipt of tenders and consents from at least a majority of noteholders and the receipt of financing.

Innisfree M&A Inc. (banks and brokers call collect at 212 750-5833, otherwise 877 825-8631) is the information agent, Wells Fargo Bank NA is the depositary and J.P. Morgan Securities Inc. (212 270-7407, call collect) and Wachovia Securities (704 715-8341, call collect) are the dealer managers.

AutoNation is an automotive retailer based in Fort Lauderdale, Fla.

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