SONIC AUTOMOTIVE, INC. (NYSE:SAH) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

On March10, 2017, Sonic Automotive, Inc. (the Company) issued and
sold $250,000,000 aggregate principal amount of its 6.125% Senior
Subordinated Notes due 2027, Series A (the Notes) at an issue
price of 50%. The Notes were offered and sold either to qualified
institutional buyers to Rule 144A under the Securities Act of
1933, as amended (the Securities Act), or to persons outside the
United States in compliance with Regulation S under the
Securities Act. A substantial portion of the net proceeds will be
used to redeem all of the Companys outstanding 7.0% Senior
Subordinated Notes due 2022 (the 7.0% Notes) to the terms of the
indenture governing those notes. Nothing in this Current Report
on Form 8-K shall be deemed to be a notice of redemption for the
7.0% Notes.

The Notes were issued under an Indenture, dated as of March10,
2017 (the Indenture), by and among the Company, certain
subsidiary guarantors named therein (the Guarantors) and U.S.
Bank National Association, as trustee. The Notes are
unconditionally guaranteed, jointly and severally, on a senior
subordinated basis by all of the Companys operating domestic
subsidiaries. The Indenture provides that interest on the Notes
will be payable semi-annually in arrears on March15 and
September15 of each year, beginning on September15, 2017. The
Indenture also contains customary restrictive covenants and
default provisions for an issue of senior notes of this nature.
The Notes will mature on March15, 2027, unless earlier redeemed
or repurchased by the Company. The Notes and the guarantees are
unsecured senior subordinated obligations and are subordinated to
all of the Companys and the Guarantors existing and future senior
debt. In addition, the Notes are structurally subordinated to all
of the liabilities of the Companys subsidiaries that are not
guaranteeing the Notes, to the extent of the assets of those
subsidiaries. A copy of the Indenture is filed with this Current
Report on Form 8-K as Exhibit 4.1 and is incorporated herein by
reference.

The Notes will be redeemable at the Companys option, in whole or
in part, at any time on or after March15, 2022 at the following
redemption prices, which are expressed as percentages of the
principal amount.

Before March15, 2022, the Company may redeem all or a part of the
Notes, subject to payment of a make-whole premium. In addition,
the Company may redeem up to an aggregate of 35% of the Notes on
or before March15, 2020 with the net cash proceeds from certain
equity offerings.

In addition, the Company and the Guarantors entered into a
Registration Rights Agreement, dated as of March10, 2017 (the
Registration Rights Agreement), with Merrill Lynch, Pierce,
Fenner Smith Incorporated, on behalf of itself and as
representative of the several initial purchasers, to which the
Company and the Guarantors have agreed to file an exchange offer
registration statement to exchange the Notes for notes registered
under the Securities Act with substantially identical terms or,
under certain circumstances, to file a shelf registration
statement to cover resales of the Notes. If the Company does not
satisfy its obligations within the prescribed time periods or
otherwise, it would be required to pay additional interest on the
Notes until the Company satisfies those obligations. A copy of
the Registration Rights Agreement is filed with this Current
Report on Form 8-K as Exhibit 4.2 and is incorporated herein by
reference.

Some of the initial purchasers and their affiliates have engaged
in, and may in the future engage in, investment banking,
commercial banking, financial advisory and other commercial
dealings in the ordinary course of business with the Company or
its affiliates. They have received, or may in the future receive,
customary fees and commissions for these transactions. An
affiliate of Merrill Lynch, Pierce, Fenner Smith Incorporated is
the administrative agent and a lender under the Companys amended
and restated syndicated revolving credit facility (the 2016
Revolving Credit Facility) and the Companys amended and restated
syndicated new and used vehicle floor plan credit facilities
(collectively, the 2016 Credit Facilities). Affiliates of J.P.
Morgan Securities LLC, Wells Fargo Securities, LLC, U.S. Bancorp
Investments, Inc. and Comerica Securities, Inc. are also lenders
under the 2016 Credit Facilities. Affiliates of Merrill Lynch,
Pierce, Fenner Smith Incorporated and Wells Fargo Securities, LLC
are also letter of credit issuers under the 2016 Revolving Credit
Facility. Affiliates of J.P. Morgan Securities LLC, Wells Fargo
Securities, LLC and U.S. Bancorp Investments, Inc. are
counterparties to interest rate swap agreements with the Company,
and affiliates of Merrill Lynch, Pierce, Fenner Smith
Incorporated provide the Company treasury management services. An
affiliate of U.S. Bancorp Investments, Inc. serves as the trustee
under the indentures governing certain of the Companys
outstanding debt securities, including the 7.0% Notes. In
addition, from time to time, certain of the initial purchasers
and their affiliates may effect transactions for their own
account or the account of customers, and hold on behalf of
themselves or their customers, long or short positions in the
Companys debt or equity securities or loans. The initial
purchasers or their affiliates may own the 7.0% Notes. As a
result, some of the initial purchasers or their affiliates may
receive part of the net proceeds from the sale of the Notes by
reason of the redemption of the 7.0% Notes held by them.

The foregoing summaries of documents described above do not
purport to be complete and are qualified in their entirety by
reference to the full text of such documents, which are filed as
exhibits hereto.

The disclosure required by this Item2.03 and included in Item1.01
is incorporated herein by reference, and the description of the
Notes incorporated herein is qualified in its entirety by
reference to the Indenture and the form of Note which are
included in Exhibit 4.1 filed herewith.

On March10, 2017, the Company issued a notice to redeem all $200
million aggregate principal amount of the 7.0% Notes to the terms
of the indenture governing those notes at a redemption price of
50% of the principal amount of the 7.0% Notes, plus the
applicable premium as of, and accrued and unpaid interest to, but
excluding, March27, 2017, the redemption date for the 7.0% Notes.
Nothing in this Current Report on Form 8-K shall be deemed to be
a notice of redemption for the 7.0% Notes.

to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

INDEX TO EXHIBITS

About SONIC AUTOMOTIVE, INC. (NYSE:SAH)

Sonic Automotive, Inc. is an automotive retailer in the United States. The Company’s operating segments include Franchised Dealerships and EchoPark. The Company’s Franchised Dealerships segment consists of traditional retail automotive franchises that sell new and used vehicles, replacement parts and vehicle repair and maintenance services, and finance and insurance products. The EchoPark segment consists of standalone pre-owned specialty retail locations that provide customers an opportunity to search, buy, service and sell their pre-owned vehicles. The Company’s dealerships provide services, including sales of both new and used cars, and light trucks; sales of replacement parts; performance of vehicle maintenance; manufacturer warranty repairs; paint and collision repair services, and arrangement of extended warranties, service contracts, financing, insurance and other aftermarket products for its customers. The Company’s specialty retail locations operate under the EchoPark brand.

SONIC AUTOMOTIVE, INC. (NYSE:SAH) Recent Trading Information

SONIC AUTOMOTIVE, INC. (NYSE:SAH) closed its last trading session up +0.30 at 20.65 with 176,744 shares trading hands.