CHARLOTTE, N.C., Nov. 23 /PRNewswire-FirstCall/ -- Sonic Automotive, Inc.
(NYSE: SAH) today announced that it has closed on $150 million aggregate
principal amount of convertible senior subordinated notes due 2015 (the
"Notes"). The Notes bear interest at a fixed rate of 4.25% for the first five
years and 4.75% thereafter and will be convertible into cash and shares, if
any, of Sonic's Class A common stock. The Notes may be redeemed by Sonic on
or after November 30, 2010. Holders of Notes may require Sonic to repurchase
their Notes on November 30, 2010 and in certain other circumstances.
Sonic intends to use the net proceeds from the offering to repay a portion
of the amounts outstanding under its revolving credit facility. Additionally,
Sonic used a portion of the net proceeds to pay the net cost of a convertible
note hedge and warrant transaction entered into with affiliates of the
underwriters, which is expected to reduce potential dilution to Sonic's common
stock from conversion of the Notes.
"This transaction provides the Company with long-term financing at an
attractive interest rate compared to our revolving credit facility and our
senior subordinated notes currently outstanding. The call spread feature,
which was purchased at a very attractive after-tax cost, effectively increases
the effective conversion price to $33.00 per share," said Jeffrey C. Rachor,
President and Chief Operating Officer. "This transaction does not change our
strategic initiatives. We remain committed to our dual strategy of a more
disciplined acquisition growth pace and a targeted debt to capital ratio of
40%."
Management will host a conference call on Monday, November 28, 2005 at
11:00 a.m. Eastern time to discuss the offering. A slide presentation will be
posted in the Investor Relations section of the Company's website prior to the
conference call. To access the live broadcast of the conference call over the
Internet go to: http://www.ccbn.com or http://www.sonicautomotive.com. A live audio of the
conference call will be accessible to the public by calling (877) 791-3416.
International callers dial (706) 643-0958.
Included herein are forward-looking statements pertaining to Sonic's
acquisition growth pace and targeted debt to capital ratio. There are many
factors that affect management's views about future events and trends of
Sonic's business. These factors involve risks and uncertainties that could
cause actual results or trends to differ materially from management's view,
including without limitation, economic conditions, risks associated with
acquisitions and risk factors described in Exhibit 99.2 to Sonic's Current
Report on Form 8-K dated November 3, 2005. Sonic does not undertake any
obligation to update forward-looking information.
About Sonic Automotive
Sonic Automotive, Inc., a Fortune 300 company based in Charlotte, N.C., is
one of the largest automotive retailers in the United States operating 174
franchises and 38 collision repair centers. Sonic can be reached on the Web
at http://www.sonicautomotive.com.
SOURCE Sonic Automotive, Inc.
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Related links:
http://www.sonicautomotive.com
Company News On-Call:
http://www.prnewswire.com/comp/125546.html
CONTACT:
Jeffrey C. Rachor, President and Chief
Operating Officer, +1-704-566-2400, or J. Todd Atenhan, Investor
Relations, +1-888-766-4218, both of Sonic Automotive, Inc.
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