Group 1 Automotive plans $1.25B note offering for Hennessy deal

Group 1 Automotive, Inc. (NYSE: GPI) announced plans to offer $1.25 billion in senior unsecured notes in two tranches, subject to market conditions, according to a press release.

The Houston-based automotive retailer intends to sell $625.0 million in notes due 2032 and $625.0 million in notes due 2035. The company said it plans to use the net proceeds, along with cash on hand, to fund its previously announced acquisition of dealership assets and related real estate from Hennessy Automobile Companies, Inc. and certain of its affiliates.

Because the Hennessy acquisition is expected to close after the note offering, Group 1 said it intends to use the proceeds in the interim to repay a portion of outstanding borrowings under its revolving credit facility, which it expects to reborrow at the closing of the acquisition.

If the Hennessy acquisition is not completed by January 6, 2027, or upon certain other triggering events, Group 1 would be required to redeem all outstanding 2032 Notes at 100% of the initial issue price plus accrued and unpaid interest. In that scenario, remaining proceeds would be used to repay revolving credit facility borrowings and for general corporate purposes.

The notes will not be registered under the Securities Act of 1933 and are being offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S.

Group 1 operates 249 automotive dealerships and 310 franchises across the United States and the United Kingdom.

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