Morgan Automotive upsizes to $700 million, talks eight-year notes to yield 4 7/8%-5 1/8%

By Paul A. Harris

Portland, Ore., April 20 – Morgan Automotive Group upsized its offering of eight-year senior notes (B2/BB-) to $700 million from $650 million and talked the notes to yield 4 7/8% to 5 1/8%, tight to initial guidance in the low-5% area, according to market sources.

Books close at 1:30 p.m. ET on Tuesday.

BofA Securities Inc. has the books.

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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