Bulletin: LCM Investment Holdings II LLC's Proposed Notes Add-On To Fund Acquisition Is Leverage Neutral

CHICAGO (S&P Global Ratings) Jan. 8, 2024--S&P Global Ratings today said that LCM Investments Holdings II LLC's (Morgan Auto Group) $300 million fungible add-on to its 2031 notes will not significantly affect the company's credit quality. All of our ratings on LCM, including our 'BB-' issuer credit rating and 'B+' issue-level rating and '5' recovery rating on the senior unsecured notes tranche, are unchanged. The recovery rating reflects our expectation for modest (10%-30%; rounded estimate: 15%) recovery prospects in the event of a default. Morgan Auto Group plans to use the proceeds from the add-on along with cash from its balance sheet, revolver availability, and unused floor plan availability to finance a nearly $800 million acquisition (including inventory) of an

...January 8, 2024 CHICAGO (S&P Global Ratings) Jan. 8, 2024--S&P Global Ratings today said that LCM Investments Holdings II LLC's (Morgan Auto Group) $300 million fungible add-on to its 2031 notes will not significantly affect the company's credit quality. All of our ratings on LCM, including our '##-' issuer credit rating and 'B+' issue-level rating and '5' recovery rating on the senior unsecured notes tranche, are unchanged. The recovery rating reflects our expectation for modest (10%-30%; rounded estimate: 15%) recovery prospects in the event of a default. Morgan Auto Group plans to use the proceeds from the add-on along with cash from its balance sheet, revolver availability, and unused floor plan availability to finance a nearly $800 million acquisition (including inventory) of an auto dealership group with seven locations in southeast Florida. This acquisition is the largest in Morgan Auto Group's history. We expect it to increase the company's top line to above $9 billion on a pro...

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