Automotive retailer Cougar JV Subsidiary LLC (doing business as Hudson Automotive Group) plans to issue a $600 million senior unsecured note and refinance its senior secured credit facilities (unrated). Proceeds from the transaction will be used to pay off existing debt, fund a distribution to its owners, and for general corporate purposes. S&P Global Ratings assigned its 'B+' issuer credit rating to the company. In addition, we assigned our 'B+' issue-level rating and '4' recovery rating (rounded estimate: 40%) to the proposed senior unsecured notes, indicating an average recovery for noteholders in a hypothetical default. The stable outlook reflects our view that Hudson's EBITDA margins will support leverage remaining at mid-4x in our forecast period, even as dealer margins normalize.
