This preview shows page 1. Sign up to view the full content.
Unformatted text preview: AutoNation Plans Buyback of Stock, Sale of Bonds WSJ, March 8, 2006 AutoNation Inc. said it will buy back as much as 19% of its common stock and pay for the shares partly by selling new bonds. Analysts and the company's top investor praised the move, but credit-rating firms raised concerns about the company's rising debt level. Shares in the Fort Lauderdale, Fla., car retailer were up $1.37, or 6.6%, at $22.26 in 4 p.m. New York Stock Exchange composite trading. AutoNation intends to buy up to 50 million shares at a price of $23 a share. AutoNation will issue up to $900 million in new bonds and take on at least $300 million in new bank debt as a result of the buyback plan, part of which will be financed with existing cash. "The planned recapitalization will weaken AutoNation's financial risk profile by more than doubling debt levels and reducing equity," said Standard & Poor's credit analyst Martin King. As a result, S&P will reduce AutoNation's corporate debt rating to triple-B-minus, the last investment-grade tier, once the company completes...
View Full Document
This note was uploaded on 07/14/2010 for the course UGBA 18195 taught by Professor Johngonzales during the Summer '10 term at Berkeley.
- Summer '10