Published on 4/5/2006 in the Prospect News High Yield Daily.
New Issue: AutoNation prices restructured $600 million two-part deal
By Paul A. Harris
St. Louis, April 5 - AutoNation Inc. priced a downsized $600 million two-part senior unsecured notes transaction (Ba2/BB+/expected BB+) on Wednesday, according to a market source.
The Fort Lauderdale, Fla., automobile retailer priced a $300 million tranche of seven-year floating-rate notes at par to yield three-month Libor plus 200 basis points, on top of price talk that had been revised from 225 bps.
The company also priced a $300 million tranche of eight-year fixed-rate notes at par to yield 7%, again on top of price talk that had been revised from 7% to 7¼%
JP Morgan, Banc of America Securities LLC and Wachovia Securities were joint bookrunners for the Rule 144A and Regulation S transaction.
Earlier in the week, the bond offering was downsized by $200 million and the company's bank loan increased by $300 million.
Call protection on the fixed-rate notes was decreased to three years from four years.
Proceeds will be used to help fund purchase 50 million shares of common stock at $23 per share and up to $323.5 million 9% senior notes due 2008.
| Issuer: | AutoNation Inc.
|
| Amount: | $600 million (decreased from $600 million)
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| Security description: | Senior unsecured notes
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| Bookrunners: | JP Morgan, Banc of America Securities LLC, Wachovia Securities
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB+
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| Fitch: BB+ expected
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| Trade date: | April 5
|
| Settlement date: | April 12
|
|
|
| Floating-rate tranche
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| Amount: | $300 million
|
| Maturity: | April 15, 2013
|
| Coupon: | Three-month Libor plus 200 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 200 bps
|
| Call features: | Make-whole call until April 15, 2008, then callable at 103, 102, 101, par on April 15, 2011
|
| Equity clawback: | Until April 15, 2009 for 40%
|
| Price talk: | Three-month Libor plus 200 bps (revised from 225 bps)
|
|
|
| Fixed-rate tranche
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| Amount: | $300 million
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| Maturity: | April 15, 2014
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| Coupon: | 7%
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| Price: | Par
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| Yield: | 7%
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| Spread: | 214 bps
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| Call features: | Make-whole call until April 15, 2009 then callable at 105.250, 103.50, 101.75, par on and after April 15, 2012
|
| Equity clawback: | Until April 15, 2009 for 40%
|
| Price talk: | 7%, revised from 7%-7¼%
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