Lithia Motors, Inc. (NYSE:LAD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry Into a Material Definitive Agreement
On August 1, 2017, we amended our existing credit facility with U.S. Bank National Association as agent for the lenders, and U.S. Bank National Association; JPMorgan Chase Bank, N.A.; Toyota Motor Credit Corporation; American Honda Finance Corporation; Mercedes-Benz Financial Services USA LLC; TD Bank, N.A.; Bank of America, N.A.; Capital One, N.A.; BMW Financial Services NA, LLC; KeyBank National Association; Bank of the West; Ally Bank; BMO Harris Bank, N.A.; Branch Banking & Trust Company; Santander Bank, N.A.; VW Credit, Inc.; Nissan Motor Acceptance Corporation; and Hyundai Capital America, as lenders, to a Seventh Amendment to Amended and Restated Loan Agreement.
Among other changes, the amendment:
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increases the total financing commitment from $2.05 billion to $2.40 billion (which may be further expanded, subject to lender approval, up to a total of $2.75 billion); |
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extends the expiration date of the credit facility to August 1, 2022; |
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eliminates one of the prior restrictions on the incurrence of certain types of indebtedness, provided that compliance with financial covenants, including a leverage ratio test, is still required; |
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permits certain subsidiaries to obtain debt financing directly from manufacturers and their financing affiliates provided that the principal amount of the debt financing does not exceed 15% of the aggregate commitment under our amended credit facility on the effective date of the amendment; and |
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eliminates the maximum amount we may pay for acquisitions without lender consent so long as our leverage ratio (as defined in the agreement, and after giving pro forma effect to the acquisition, as described in the agreement) is below 4.00 to 1.00 or, if our leverage ratio is 4.00 to 1.00 or greater, so long as the price is less than or equal to 10% of our tangible net worth as of the last day of the fiscal quarter most recently ended prior to the date of the completion of the acquisition. |
Under the amended agreement, the initial allocation of the financing commitment is for (i) up to $250 million in used vehicle inventory floor plan financing, (ii) up to $250 million in revolving financing for general corporate purposes, including acquisitions and working capital, and (iii) up to $1.9 billion in new vehicle inventory floor plan financing (an increase from of the allocation immediately prior to the amendment, which was $1.55 billion). The amended agreement permits certain reallocations of the financing commitments provided that, among other requirements, the aggregate used vehicle floorplan commitment may not be more than 16.5% of the amount of the aggregate commitment, and the aggregate revolving loan commitment may not be more than 18.75% of the amount of the aggregate commitment
A copy of the Seventh Amendment to Amended and Restated Loan Agreement is attached as Exhibit 10.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit No. |
Description |
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10.1 |
Seventh Amendment to Amended and Restated Loan Agreement dated August 1, 2017 |
LITHIA MOTORS INC ExhibitEX-10.1 2 lad20170803_ex10-1.htm EXHIBIT 10.1 Exhibit SEVENTH AMENDMENTTOAMENDED AND RESTATED LOAN AGREEMENTThis Seventh Amendment to Amended and Restated Loan Agreement (this “Amendment”),…To view the full exhibit click here
About Lithia Motors, Inc. (NYSE:LAD)
Lithia Motors, Inc. is an operator of automotive franchises and a retailer of new and used vehicles and services. The Company operates in three segments: Domestic, Import and Luxury. Its Domestic segment consists of retail automotive franchises that sell new vehicles of Chrysler, General Motors and Ford. Its Import segment consists of retail automotive franchises that sell new vehicles manufactured primarily by Honda, Toyota, Subaru, Nissan and Volkswagen. Its Luxury segment consists of retail automotive franchises that sell new vehicles of BMW, Mercedes-Benz and Lexus. Its franchises in each segment sell used vehicles, parts and automotive services, and automotive finance and insurance products. Its operations involve the use, handling, storage and contracting for recycling and disposal of materials, such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires and fuel.
