Lithia Motors ups loan commitments to $2.6 billion, extends to 2023

By Susanna Moon

Chicago, June 28 – Lithia Motors, Inc. increased its total loans commitments to $2.6 billion and extended the credit facility until July 2023 with U.S. Bank NA and J.P. Morgan Securities LLC as co-lead arrangers and joint bookrunners.

The previous loan agreement for $2.4 billion of commitments had been set to mature in August 2022.

The company amended its loan agreement on Monday with U.S. Bank NA as administrative agent, according to an 8-K filed with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA and Toyota Motor Credit Corp. are the co-syndication agents; American Honda Finance Corp., TD Bank, NA, Mercedes-Benz Financial Services USA LLC and Bank of America, NA are the co-documentation agents.

Interest on the loans will be one-month Libor plus 125 basis points for new vehicle floorplan financing, one-month Libor plus 150 bps for used vehicle floorplan financing and will range for Libor plus 125 bps to 225 bps for revolving loans, based on leverage. The commitment fee ranges from 15 bps to 40 bps.

The company may request an increase in the aggregate new vehicle floorplan commitment of up to $400 million as long as the aggregate commitments do not exceed $3 billion.

Under the amended terms, $50 million of commitments has been allocated to used vehicle inventory floorplan financing, $450 million to revolving loans for acquisitions and other general corporate purposes, and the remaining $2.1 billion for new vehicle inventory floorplan financing.

The company said it has the option to reallocate the commitments, provided that the used vehicle inventory floorplan financing commitment does not exceed 16.5% of aggregate commitments, the revolving loan commitment does not exceed 18.75% of aggregate commitments, and the sum of these commitments plus the new vehicle inventory floorplan financing commitment does not exceed the aggregate total financing commitment of $2.6 billion.

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

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