Sonic Automotive to fund acquisition, redeem 6 1/8% notes due 2027 with proceeds of new notes

By Rebecca Melvin

Concord, N.H., Oct. 13 – Sonic Automotive, Inc. plans to use proceeds of a new notes offering to fund its acquisition of RFJ Auto Partners Inc. and to redeem its 6 1/8% notes due 2027, according to a company news release on Wednesday.

The company is planning to sell $1 billion of senior notes in two tranches due 2029 and 2031, subject to market conditions.

The RFJ Auto Partners acquisition will be paid for with proceeds of the dual-tranche offering together with additional borrowings and cash on hand.

If the acquisition is not completed before Jan. 31, 2022, the company will be required to redeem $700 million of the notes, with such redemption being allocated to each series of notes on a pro rata basis at par plus accrued interest.

In addition, Sonic issued on Wednesday a conditional notice of redemption to the holders of the 6 1/8% notes, notifying the holders that it intends to redeem all of the notes on Oct. 28.

Pending these uses, proceeds of the new notes will be used for general corporate purposes, including the acquisition and development of dealerships and related real property.

Sonic is a Charlotte, N.C.-based automotive retailer.

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