Group 1 Automotive Inc.’s GPI shares gained 2.7% to close at $78.99 on Dec 4, after the company announced the pricing of the private placement of its 5.250% senior unsecured notes due 2023. The company increased the offering size of these notes to $300 million from $250 million announced earlier on the same day. The offering is scheduled to close on Dec 8, 2015, subject to customary closing conditions.
Group 1 Automotive plans to utilize the net proceeds from the senior notes offering to repay the balance outstanding under the acquisition line of its revolving credit facility and to make a contribution to its floorplan offset account. The remaining amount will be used for general corporate purposes.
Group 1 Automotive’s revolving credit facility consists of two tranches, providing a maximum of $1.6 billion for U.S. vehicle inventory floorplan financing (floorplan line), as well as a maximum of $320 million and a minimum of $100 million for working capital and general corporate purposes, including acquisitions (“acquisition line”). Borrowings outstanding under the acquisition line as of Sep 30, 2015, were $138.2 million.
Group 1 Automotive is one of the leading automotive retailers in the world. As of Dec 3, 2015, the company operated 153 automotive dealerships, 200 franchises and 35 collision centers in the U.S, the U.K. and Brazil, offering 32 brands of automobiles.
Currently, Group 1 Automotive carries a Zacks Rank #3 (Hold). Some better-ranked automobile stocks include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and Fox Factory Holding Corp FOXF, all carrying a Zacks Rank #2 (Buy).
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