Penske Automotive Group Announces $550 Million Senior Subordinated Notes Offering

Rhea-AI Summary

Penske Automotive Group (NYSE:PAG) announced a $550 million offering of fixed-rate Senior Subordinated Notes due 2025, contingent on market conditions. The net proceeds will be used to redeem existing $550 million 5.75% Senior Subordinated Notes due 2022 by October 1, 2020, and for various corporate purposes, including repaying U.S. credit agreements and floor plan debt. The offering is conducted through a prospectus supplement filed with the SEC. Forward-looking statements highlight the uncertainties associated with the financing.

Positive

• Issuing $550 million in Senior Subordinated Notes to improve debt structure.
• Proceeds to redeem $550 million in higher-interest notes, potentially reducing interest expenses.

Negative

• The need to refinance debt could indicate potential liquidity concerns.

BLOOMFIELD HILLS, Mich., Aug. 4, 2020 /PRNewswire/ -- Penske Automotive Group, Inc., (NYSE:PAG) a diversified international transportation services company, today announced that it intends to offer $550 million aggregate principal amount of fixed rate Senior Subordinated Notes due 2025 (the "2025 Notes"), subject to market and other customary closing conditions, pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission ("SEC").

The company intends to use the net proceeds of this offering to redeem its $550 million 5.75% Senior Subordinated Notes due 2022 on October 1, 2020.  In the interim, we intend to repay amounts outstanding under our U.S. credit agreement, to repay various floor plan debt, and for general corporate purposes. 

This offering is being made solely by means of a prospectus supplement and accompanying prospectus, which has been filed with the SEC.  A copy of the prospectus for the offering may be obtained on the SEC's website, www.sec.gov.  Alternatively, you may request it by contacting BofA Securities, Inc., NC1-004-03-43, 200 North College Street, 3^rd floor, Charlotte NC 28255-0001, Attn: Prospectus Department, or by email at dg.prospectucs_requests@bofa.com, J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, Attn: Prospectus Department, 1155 Long Island Avenue, Edgewood, NY 11717, or telephone: 1-866-803-9204 or Wells Fargo Securities, LLC, 550 S. Tryon Street, 5^th Floor, Charlotte, NC 28202 Attn: Leveraged Syndicate or email IBCMDCMLSHYLeveragedSyndicate@wellsfargo.com or by facsimile at (704) 410-4874 (with such fax to be confirmed by telephone to (704) 410-4885).

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, and shall not constitute an offer, solicitation or sale in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

Safe Harbor Statement
This press release contains forward-looking statements regarding the company's proposed offering of the 2025 Notes.  The forward-looking statements in this release are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different.  These factors include, but are not limited to, successful negotiation of definitive documentation for the financing arrangement and satisfaction or waiver of all conditions to closing.  The consummation of the transaction may also be impacted by the other risks and uncertainties detailed in the company's filings with the SEC.  While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. 

About Penske Automotive
Penske Automotive Group, Inc., (NYSE: PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, the United Kingdom, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG is a member of the Fortune 500 and Russell 1000 indexes and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.

Inquiries should contact:

J. D. Carlson Executive Vice President and Chief Financial Officer 248-648-2810 jcarlson@penskeautomotive.com

Anthony R. Pordon Executive Vice President Investor Relations and Corporate Development 248-648-2540 tpordon@penskeautomotive.com

 

 

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SOURCE Penske Automotive Group, Inc.

FAQ

What is the purpose of Penske Automotive's $550 million notes offering?

The offering aims to redeem existing $550 million 5.75% Senior Subordinated Notes due 2022 and for general corporate purposes.

When is the maturity date for the new Senior Subordinated Notes issued by PAG?

The new Senior Subordinated Notes are due in 2025.

How will Penske Automotive utilize the proceeds from the new notes?

Proceeds will be used to repay existing debts and for general corporate purposes.

What is the significance of the $550 million offering for PAG investors?

It aims to enhance the company's financial stability by reducing higher interest costs.

What risks are associated with Penske Automotive's notes offering?

Forward-looking statements indicate risks include successful negotiation of financing arrangements and market conditions.