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SEC Filings

10-Q
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-Q on 10/26/2017
Entire Document
 

7. Long-Term Debt

 

Long-term debt consisted of the following:

 

 

 

 

 

 

 

 

 

 

    

September 30,

    

December 31,

 

 

 

2017

 

2016

    

U.S. credit agreement — revolving credit line

 

$

216.0

 

$

240.0

 

U.K. credit agreement — revolving credit line

 

 

107.2

 

 

48.1

 

U.K. credit agreement — overdraft line of credit

 

 

 —

 

 

2.7

 

5.75% senior subordinated notes due 2022

 

 

545.7

 

 

545.1

 

5.375% senior subordinated notes due 2024

 

 

297.1

 

 

296.8

 

5.50% senior subordinated notes due 2026

 

 

494.2

 

 

493.7

 

3.75% senior subordinated notes due 2020

 

 

296.2

 

 

 —

 

Australia working capital loan agreement

 

 

32.8

 

 

24.7

 

Mortgage facilities

 

 

211.8

 

 

199.9

 

Other

 

 

37.1

 

 

26.1

 

Total long-term debt

 

 

2,238.1

 

 

1,877.1

 

Less: current portion

 

 

(67.6)

 

 

(48.3)

 

Net long-term debt

 

$

2,170.5

 

$

1,828.8

 

 

U.S. Credit Agreement

 

Our U.S. credit agreement (the “U.S. credit agreement”) with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation provides for up to $700.0 million in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, which includes $250.0 million in revolving loans solely for future U.S. acquisitions. The U.S. credit agreement provides for a maximum of $150.0 million of future borrowings for foreign acquisitions and expires on September 30, 2020, subject to its “evergreen” termination provisions. The revolving loans bear interest at LIBOR plus 2.00%, subject to an incremental 1.50% for uncollateralized borrowings in excess of a defined borrowing base.

 

The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by substantially all of our U.S. subsidiaries and contains a number of significant covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. We are also required to comply with specified financial and other tests and ratios, each as defined in the U.S. credit agreement including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed.

 

The U.S. credit agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to our other material indebtedness. Substantially all of our U.S. assets are subject to security interests granted to the lenders under the U.S. credit agreement. As of September 30, 2017, we had $216.0 million of revolver borrowings outstanding under the U.S. credit agreement.

 

U.K. Credit Agreement

 

Our subsidiaries in the U.K. (the “U.K. subsidiaries”) are party to a £150.0 million revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional demand overdraft line of credit with RBS (collectively, the “U.K. credit agreement”) to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes. The loans mature on the termination date of the facility, which is December 19, 2019. The revolving loans bear interest between defined LIBOR plus 1.35% and defined LIBOR plus 3.0% and the demand overdraft line of credit bears interest at the Bank of England Base Rate plus 1.75%. As of September 30, 2017, outstanding loans under the U.K. credit agreement amounted to £80.0 million ($107.2 million).

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