Morgan Automotive begins marketing $650 million eight-year notes; initial talk low 5% area

By Paul A. Harris

Portland, Ore., April 19 – Morgan Automotive Group began a brief roadshow for a $650 million offering of eight-year senior notes (expected ratings B2/BB-) on Monday, according to market sources.

The deal, which was set to kick off on a Monday conference call with investors, is in the market with initial guidance in the low 5% area.

The roadshow runs through Tuesday.

BofA Securities Inc. is the bookrunner.

The notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback and a 101% poison put.

The issuing entity will be LCM Investments Holdings II, LLC, which does business as Morgan Automotive Group.

The Tampa, Fla.-based automotive retailer plans to use the proceeds plus additional borrowings under its amended credit facilities to pay off its cap loan facility and pay down its used vehicle floorplan facility, as well as for near-term real estate construction and to fund distributions to partners, including payments of certain taxes.

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