Group 1 Automotive Announces Pricing of an Additional $200 Million Offering of its 4.000% Senior Notes Due 2028

Rhea-AI Summary

Group 1 Automotive, Inc. (NYSE: GPI) has announced the pricing of a $200 million private placement of its 4.000% senior unsecured notes due in 2028. The offering is set at an effective yield of approximately 3.957% and is expected to close on October 21, 2021. Funds will be used for the acquisition of Prime Automotive Group or general corporate purposes. These notes are additional to the $550 million issued earlier in August 2020. The notes will not be registered under the Securities Act, limiting their sale to qualified buyers.

Positive

• Successfully pricing an additional $200 million in unsecured notes demonstrates strong investor confidence.
• The funds will potentially facilitate the acquisition of Prime Automotive Group, which could enhance market position.

Negative

• Issuing new debt may increase financial leverage and interest expense for the company.
• Market conditions and regulatory hurdles could impede the successful completion of the Prime Acquisition.

HOUSTON, Oct. 6, 2021 /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), an international, Fortune 500 automotive retailer, today announced the pricing of its private placement of an additional $200 million in aggregate principal amount of its 4.000% senior unsecured notes due 2028 (the "New Notes"). The New Notes will be sold to investors at an offering price of 100.250% of the principal amount, which implies an effective yield to maturity of approximately 3.957%. The offering is expected to close on October 21, 2021, subject to customary closing conditions.

The New Notes are being offered as additional notes to the $550 million in aggregate principal amount of its 4.000% senior unsecured notes due 2028 previously issued by the Company on August 17, 2020 (the "Initial Notes"). The New Notes will have identical terms as the Initial Notes, other than the issue date, and the New Notes and the Initial Notes will be treated as a single class of securities under the indenture.

The Company intends to use the net proceeds of the offering to fund a portion of the consideration for the acquisition of substantially all of the assets or equity of the Prime Automotive Group (the "Prime Acquisition") or, if the Prime Acquisition is not consummated, for general corporate purposes, which may include the repayment of existing indebtedness.

The New Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws, and thus, the New Notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The New Notes have been offered to persons reasonably believed to be qualified institutional buyers in an offering exempt from registration pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside of the United States in compliance with Regulation S under the Securities Act. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy any of these New Notes or any security, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

ABOUT GROUP 1 AUTOMOTIVE, INC.

Group 1 owns and operates 190 automotive dealerships, 247 franchises, and 48 collision centers in the United States, the United Kingdom and Brazil that offer 33 brands of automobiles. Through its dealerships, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.

Investors please visit www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, www.facebook.com/group1auto, and www.twitter.com/group1auto, where Group 1 discloses additional information about the Company, its business, and its results of operations.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on the Company's current expectations and assumptions regarding the Company's business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding the Company's strategic investments, goals, plans, projections and guidance regarding the Company's financial position, results of operations, business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) the Company's ability to obtain an inventory of desirable new and used vehicles, (e) the Company's relationship with the Company's automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) the Company's cost of financing and the availability of credit for consumers, (g) the Company's ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, (i) the impacts of COVID-19 on the Company's business, (k) the impacts of any potential global recession; (l) the Company's ability to maintain sufficient liquidity to operate; (m) the risk that the proposed transaction will not be consummated in a timely manner; (n) risks that any of the closing conditions to the Prime Acquisition may not be satisfied or may not be satisfied in a timely manner; and (o) our ability to successfully integrate recent and future acquisitions.

For additional information regarding known material factors that could cause the Company's actual results to differ from the Company's projected results, please see the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Investor contacts:

Sheila Roth
Manager, Investor Relations
Group 1 Automotive, Inc.
713-647-5741 | sroth@group1auto.com

Media contacts:

Pete DeLongchamps
Senior Vice President, Manufacturer Relations, Financial Services and Public Affairs
Group 1 Automotive, Inc.
713-647-5770 | pdelongchamps@group1auto.com

or

Clint Woods
Pierpont Communications, Inc.
713-627-2223 | cwoods@piercom.com

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SOURCE Group 1 Automotive, Inc.

FAQ

What is the total amount of senior unsecured notes being offered by GPI?

Group 1 Automotive is offering an additional $200 million in senior unsecured notes.

What is the yield on the new notes from Group 1 Automotive?

The new notes have an effective yield to maturity of approximately 3.957%.

When is the closing date for the new notes offering by GPI?

The offering is expected to close on October 21, 2021.

What will the proceeds from the new notes be used for?

Proceeds will fund the acquisition of Prime Automotive Group or for general corporate purposes.

Are the new notes registered under the Securities Act?

No, the new notes have not been registered and are being offered to qualified institutional buyers.