AutoNation Inc.'s Proposed $750 Million Senior Unsecured Notes Rated 'BBB-'

NEW YORK (S&P Global Ratings) July 26, 2021--S&P Global Ratings today assigned its 'BBB-' rating to Fort Lauderdale, Fla.-based auto retailer AutoNation Inc.'s proposed $750 million senior unsecured notes, which will be separated into two tranches due in 2028 and 2031. The company will use the proceeds to pay down outstanding commercial paper and for general corporate purposes, including its AutoNation USA expansion, acquisitions, and share repurchases. In our view, the debt issuance is largely leverage neutral initially because proceeds will pay down those borrowings and build cash on the balance sheet, but leverage will increase slightly over time with investments and share repurchases. Over the next couple of years, we expect currently very low leverage will increase to above

...July 26, 2021 NEW YORK (S&P Global Ratings) July 26, 2021--S&P Global Ratings today assigned its '###-' rating to Fort Lauderdale, Fla.-based auto retailer AutoNation Inc.'s proposed $750 million senior unsecured notes, which will be separated into two tranches due in 2028 and 2031. The company will use the proceeds to pay down outstanding commercial paper and for general corporate purposes, including its AutoNation USA expansion, acquisitions, and share repurchases. In our view, the debt issuance is largely leverage neutral initially because proceeds will pay down those borrowings and build cash on the balance sheet, but leverage will increase slightly over time with investments and share repurchases. Over the next couple of years, we expect currently very low leverage will increase to above 2x as new and used vehicle pricing reverts toward more normal ranges. Still, through the business cycle we expect leverage to remain well below 3x and free operating cash flow to debt above 15% on...

Ratings Action