Daily News: April 20, 2012

U.S. Bank Agents New $650 Credit Facility for Lithia Motors


Lithia Motors, the ninth largest auto dealer in the U.S., said it has completed a new $650 million five-year revolving syndicated credit facility with ten institutions that will expire in April 2017. The facility can be expanded to $800 million in total availability.

Lithia said the revolving facility will provide $500 million for new vehicle inventory floorplan financing, $100 million for used vehicle inventory floorplan financing and $50 million for general corporate purposes including working capital and acquisitions.

According to the news release, U.S. Bank served as administrative agent for the facility. U.S. Bank and JPMorgan Chase were joint bookrunners for the syndication. Lenders in the syndicated facility included: U.S. Bank, JPMorgan Chase, Bank of America, Wells Fargo, Bank of the West and Key Bank. In addition, four manufacturer-affiliated finance companies – Mercedes-Benz Financial, Toyota Motor Credit; BMW Financial Services and Nissan Motor Acceptance – participated in the deal.

Commenting on the transaction, Chris Holzshu, senior vice president and chief financial officer, said, “The Lithia team would like to thank all of the participants for their support in completing the syndication. The new revolving facility expands our existing partnership with these banks and manufacturer-affiliated finance companies and is a testament to our deep and meaningful relationship with them.”

Under the terms of the new agreement, Lithia notes that based on current borrowing levels pretax interest expense will be reduced by approximately $430,000 per quarter.

Medford, OR-based Lithia Motors sells 25 brands of new and all brands of used vehicles at 83 stores, which are located in 11 states.