United Auto to redeem $300 million 9 5/8% notes

By Jennifer Chiou

New York, Jan. 26 - United Auto Group, Inc. announced the March 15 redemption of its $300 million of 9 5/8% senior subordinated notes due 2012.

The Bloomfield Hills, Mich.-based automotive retailer will redeem the notes at 104.813%.

In December, the company completed a $375 million offering of 7¾% senior subordinated notes with the intention of refinancing the 9 5/8% notes.

Proceeds from the transaction were temporarily used to repay amounts outstanding under the company's revolving credit agreement.

United Auto added that it intends to fund the redemption price, estimated to be $314 million, with its U.S. floor plan borrowings.

Chief financial officer Bob O'Shaughnessy said in a news release: "Upon completing the redemption of the notes, we will have achieved our goal of lengthening the weighted average maturity of our outstanding fixed rate indebtedness, reducing our exposure to interest rate volatility, and reducing the weighted average interest rate of our fixed rate indebtedness."

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