Autonation downsizes two-part offering to $600 million, shifts $200 million to bank loan

By Paul A. Harris

St. Louis, April 3 - Autonation Inc. downsized its two-part offering of senior unsecured notes (Ba2/BB+/expected BB+) to $600 million from $800 million, shifting $200 million to its bank loan on Monday, according to a market source.

The Fort Lauderdale, Fla., automotive retailer plans to sell eight-year fixed-rate notes, with four years of call protection, which it has talked at 7% to 7¼%.

Autonation also plans to sell seven-year floating-rate notes, with two years of call protection, which it has talked at three-month Libor plus 225 basis points.

Pricing is expected on Wednesday.

Tranche sizes remain to be determined, according to the market source. Before the company downsized the offering to $600 million, the tranches had been announced at $400 million apiece.

JP Morgan, Banc of America Securities LLC and Wachovia Securities are joint bookrunners for the Rule 144A and Regulation S transaction.

Proceeds will be used to help purchase 50 million shares of its common stock at $23 per share and up to $323.5 million of its 9% senior notes due 2008.

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