UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 18, 2005
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Asbury Automotive Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
5511 01-0609375
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(Commission File Number) (IRS Employer Identification No.)
622 Third Avenue, 37th Floor, New York, NY 10017
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(Address of principal executive offices) (Zip Code)
(212) 885-2500
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement.
On March 23, 2005, Asbury Automotive Group, Inc. (the "Company") and certain of
its subsidiaries entered into a new three-year credit agreement with the lenders
listed therein, JPMorgan Chase Bank, N.A., as administrative agent and floor
plan agent, Bank of America, N.A., as syndication agent, and J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as joint bookrunners and
co-lead arrangers. In addition to a number of leading regional and national
commercial banks, Ford Motor Credit Corporation, Toyota Financial Services,
Southeast Toyota Finance and BMW Financial Services are participating as lenders
under our new credit agreement.
The Company and its subsidiaries have or may have customary banking
relationships with some of the lenders based on the provision of a variety of
financial services, including investment banking, underwriting, lending,
commercial banking and other services. These lenders have received, and may in
the future receive, customary compensation from the Company and its subsidiaries
for such services. In addition, some of the Company's subsidiaries purchase
motor vehicles for sale at our dealerships from affiliates of Ford Motor Credit
Corporation, Toyota Financial Services, Southeast Toyota Finance and BMW
Financial Services.
The new credit agreement is more fully described in Item 2.03 and attached
hereto as Exhibit 10.1 of this report and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
In connection with entering into the new three-year credit agreement dated as of
March 23, 2005 described further in Item 2.03 below, on March 18, 2005 the
Company delivered the notice required to terminate the First Amended and
Restated Credit Agreement, dated as of June 6, 2003, by and among the Company
and Ford Motor Credit Company, DaimlerChrysler Services North America LLC and
General Motors Acceptance Corporation (the "Terminated Agreement"). The
Terminated Agreement provided for a total revolving credit facility in a maximum
principal amount of $100 million. Interest accrued on advances was repaid at the
applicable LIBOR rate and was payable monthly. The interest rate on loans was
increased by 2.0% per annum, at the option of the lenders, after the occurrence
and during the continuation of an event of default. Amounts borrowed under the
Terminated Agreement were secured by certain tangible and intangible assets of
the Company and all of its subsidiaries. The Company was required to pay a
Commitment Fee equal to 0.35% per annum on unused commitments. The Terminated
Agreement included various affirmative and negative covenants, customary
conditions for credit agreements of this type with respect to the incurrence of
new indebtedness and the acceleration of amounts due upon the occurrence of an
event of default, not otherwise waived or cured. The Terminated Agreement will
terminate on March 23, 2005, and will be replaced by the new three-year credit
agreement dated as of March 23, 2005 described further in Item 2.03 below.
Also in connection with entering into the new three-year credit agreement,
described further in Item 2.03 below, the Company expects within the next
approximately thirty days to terminate its floor plan financing under the Master
Loan and Security Agreement, by and among the Company, certain of the Company's
subsidiaries engaged in the sale of new motor vehicles manufactured by
DaimlerChrysler, and DaimlerChrysler Services North America LLC, dated as of
July 30, 2003.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
As discussed above, on March 23, 2005, the Company and certain of its
subsidiaries entered into a new three-year credit agreement with the lenders
listed therein, JPMorgan Chase Bank, N.A., as administrative agent and floor
plan agent, Bank of America, N.A., as syndication agent, and J.P. Morgan
Securities Inc. and Banc of America Securities LLC, as joint bookrunners and
co-lead arrangers. The new credit agreement provides for a total revolving
credit facility in a maximum principal amount of $800 million, consisting of
floor plan loan commitments in a maximum principal amount of $650 million and
revolving credit loan commitments in a maximum principal amount of $150 million
(which includes a $15 million letter of credit facility). Interest on floor plan
loans is payable monthly and interest on revolving credit loans is payable at
the end of the applicable interest periods (or at the end of every third month,
if the interest period is longer than 3 months). Unless extended, the new credit
agreement matures on March 23, 2008, at which time the outstanding principal
balance and all interest thereon will be due.
The proceeds of the floor plan loans (including the floor plan swing line loans)
may be used only to finance motor vehicles held for resale. The proceeds of the
revolving credit loans (including the revolving credit swing line loans) may be
used only for working capital, general corporate purposes (including the
issuance of letters of credit and to pay outstanding floor plan loans) and to
make acquisitions permitted under the agreement.
Amounts borrowed under the new credit facility are secured by certain tangible
and intangible assets of the Company and all of its subsidiaries, other than
those subsidiaries engaged in the sale of new motor vehicles manufactured by
Toyota or Lexus under dealer franchise agreements or licensing agreements with
those manufacturers or their authorized distributors (the "Toyota/Lexus Floor
Plan Borrowers"). Floor plan loans made to the Toyota/Lexus Floor Plan Borrowers
are cross-collateralized by the motor vehicle inventory of these entities, with
each Toyota/Lexus Floor Plan Borrower additionally securing its respective
borrowings with its assets.
Interest rates for borrowing under the new credit facility are dependent on the
type of loan requested by the borrowers, and in the case of certain loans, on
certain financial measurements at the time a loan is made. Loans drawn under the
revolving credit tranche can be either Alternate Base Rate loans or Eurodollar
loans. Alternate Base Rate loans bear interest at an amount equal to (x) the
greater of (i) the prime rate in effect and (ii) the federal funds effective
rate plus 1/2 of 1.00%, on the day of determination, plus (y) .50% to 1.50%.
Eurodollar loans bear interest at LIBOR plus 2.00% to 3.00% depending upon
certain financial measurements of the Company. Swing line loans drawn under the
revolving credit tranche bear interest at an amount equal to the greater of (i)
the prime rate in effect and (ii) the federal funds effective rate plus 1/2 of
1.00%, on the day of determination. Loans (including swing line loans) drawn
under the floor plan tranche bear interest at LIBOR plus 1.25% or 1.375%,
depending on the type of motor vehicles to be purchased with the proceeds from
the loan. Upon the occurrence and continuance of an event of default under the
new credit facility, all outstanding Eurodollar loans will be converted to
Alternate Base Rate loans and the interest rate otherwise applicable to all
loans then outstanding will be increased by 3.00% per annum.
The Company is required to pay a floor plan loan commitment fee equal to 0.25%
per annum times the average unused amount of the floor plan loan commitments
during the most recently ended fiscal quarter and a revolving credit loan
commitment fee equal to 0.375% per annum times the average unused amount of the
revolving credit loan commitments. In connection with the floor plan tranche,
the Company has also agreed to pay a fee equal to $6.25 for each motor vehicle
financed. In connection with the $15 million letter of credit facility, the
Company must pay a letter of credit fee with respect to each outstanding letter
of credit equal to the greater of (i) $500 per annum and (ii) the applicable
margin for Eurodollar loans under the revolving credit facility multiplied by
the face amount of the letter of credit per annum. Fees under the new credit
facility are paid quarterly.
The credit agreement includes various affirmative and negative covenants, such
as requirements that the Company will not at any time permit its adjusted net
worth to be less than or equal to $350 million. The credit agreement also
includes customary conditions for credit agreements of this type with respect to
incurring new indebtedness and limitations on cash dividends. The Company and
its subsidiaries may pay dividends at any time, provided that giving effect to
the payment of those dividends does not trigger certain defaults or events of
default, as defined in the agreement. The Company may declare and pay cash
dividends on its capital stock and may purchase shares of its capital stock,
provided the aggregate amount payable in respect of cash dividends paid by the
Company or the shares purchased by the Company shall not exceed an amount equal
to the sum of $15 million plus one-half of the aggregate net income of the
Company in accordance with GAAP for the period subsequent to December 31, 2003
and ending on the date of determination. The credit agreement also contains
customary events of default, including change of control, non-payment of
obligations and cross-defaults to our other indebtedness. Payments under the
credit agreement may be accelerated upon the occurrence of an event of default
that is not otherwise waived or cured.
This description of the credit agreement is not complete and is qualified in its
entirety by the actual terms of the agreement, a copy of which is incorporated
herein by reference and attached hereto as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
10.1 Revolving Credit Agreement, dated as of March 23,
2005, among Asbury Automotive Group, Inc. and the
Subsidiary Borrowers listed therein, as
borrowers, the Lenders listed therein, JPMorgan
Chase Bank, N.A., as administrative agent and as
floor plan agent, Bank of America, N.A., as
syndication agent, and J.P. Morgan Securities
Inc. and Banc of America Securities LLC, as joint
bookrunners and co-lead arrangers.
99.1 Press release dated March 24, 2004.
SIGNATURE
Pursuant 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.
ASBURY AUTOMOTIVE GROUP, INC.
Date: March 24, 2005 By: /s/ Kenneth B. Gilman
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Name: Kenneth B. Gilman
Title: President and Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
10.1 Revolving Credit Agreement, dated as of March 23, 2005, among
Asbury Automotive Group, Inc. and the Subsidiary Borrowers
listed therein, as borrowers, the Lenders listed therein,
JPMorgan Chase Bank, N.A., as administrative agent and as floor
plan agent, Bank of America, N.A., as syndication agent, and J.P.
Morgan Securities Inc. and Banc of America Securities LLC, as
joint bookrunners and co-lead arrangers.
99.1 Press release dated March 24, 2005.