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

NEW YORK (S&P Global Ratings) Feb. 19, 2025--S&P Global Ratings today assigned its 'BBB-' issue-level rating to Fort Lauderdale, Fla.-based auto retailer AutoNation Inc.'s proposed senior unsecured notes due 2035. The company will use the proceeds to pay down outstanding commercial paper and for general corporate purposes. 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. The company had borrowed under its commercial paper program to repay a $450 million senior note in November 2024. More recently, AutoNation?s EBITDA margins have moderated as new vehicle gross profit per unit normalized and floorplan costs increased. The company also deployed significant capital toward share repurchases in

...February 19, 2025 NEW YORK (S&P Global Ratings) Feb. 19, 2025--S&P Global Ratings today assigned its '###-' issue-level rating to Fort Lauderdale, Fla.-based auto retailer AutoNation Inc.'s proposed senior unsecured notes due 2035. The company will use the proceeds to pay down outstanding commercial paper and for general corporate purposes. 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. The company had borrowed under its commercial paper program to repay a $450 million senior note in November 2024. More recently, AutoNation's EBITDA margins have moderated as new vehicle gross profit per unit normalized and floorplan costs increased. The company also deployed significant capital toward share repurchases in 2024. We estimate S&P Global Ratings-adjusted leverage of around 3x for fiscal 2024. We think the company will continue to allocate excess free cash flow toward opportunistically...

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