Lithia Motors lifts loan agreement to $2.4 billion, extends to 2022

By Wendy Van Sickle

Columbus, Ohio, Aug. 3 – Lithia Motors, Inc. expanded and extended its loan agreement with U.S. Bank NA as administrative agent on Tuesday, according to an 8-K filed with the Securities and Exchange Commission.

The amended loan agreement lifts capacity to $2.4 billion from $2.05 billion. Lithia may request up to $275 million of additional commitments.

The maturity date has been extended through to Aug. 1, 2022.

The amended agreement eliminates a prior restriction on incurrence of certain types of debt, provided that compliance with financial covenants, including a leverage ratio test, is still required.

The amendment also permits certain subsidiaries to obtain debt financing directly from manufacturers and their financing affiliates provided that the principal amount of the debt financing does not exceed 15% of the aggregate commitment under the credit agreement on the amendment date.

Also eliminated was the maximum Lithia may pay for acquisitions without lender consent so long as its leverage ratio is below 4.00 to 1.00 or so long as the price is less than or equal to 10% of Lithia’s tangible net worth as of the last day of the fiscal quarter most recently ended prior to the date of the completion of the acquisition.

Lithia Motors is a Medford, Ore.-based automotive retailer.

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