Car dealership real estate investment trust, Capital Automotive LLC's covenant cushion has fallen below 10%. We are revising the outlook to negative from stable and affirming the 'B+' corporate credit rating. At the same time, we are raising our first-lien issue level rating to 'BB' from 'BB-', driven by the partial refinancing of this term loan from additional asset backed security debt. The negative outlook reflects our view that weakening covenant cushion levels may constrain the company's liquidity and signifies a more aggressive stance on financial policy. On Aug. 19, 2016, S&P Global Ratings affirmed its 'B+' corporate credit rating on Capital Automotive LLC and its subsidiary Capital Automotive L.P. (together, CARS). We revised the outlook to negative from stable.
