Case Study · High Yield Notes
Hudson Upsizes Notes Offering to Refinance Debt
$675mm 8yr Senior Unsecured Notes
May 2024
- On 5/7/24, Hudson Automotive Group priced $675mm of 8yr 8.00% Senior Unsecured Notes at par, which were upsized in-market from $600mm
- The deal was initially launched at $600mm with price talk of 8.25%, but strong market demand allowed Hudson to upsize the offering to $675mm while also lowering the coupon to 8.00%
- The proceeds of the offering combined with proceeds from a new syndicated credit facility will be used to refinance ~$1.4bn of existing debt and purchase $44mm of real estate from Redwood Holdings
- The bonds were marketed with 2023 Adj. EBITDA of ~$300mm and approximately 2.4x secured leverage and 4.7x total leverage
- S&P Global Ratings expects leverage to remain around 4.5x over the next few years as margins normalize and the steady pace of acquisitions continues
- Moody’s forecasts pro forma debt to EBITDA will improve to around 4.25x as a full year of acquisitions is realized and cost discipline is maintained
| Final Terms | 2032 Notes |
|---|---|
| Pricing Date | May 7, 2024 |
| Issuer | Cougar JV Subsidiary, LLC |
| Corporate Ratings | B+ / Ba3 |
| Bond Ratings | B+ / B2 |
| Issue | Senior Unsecured Notes |
| Amount | $675mm |
| MaturityCall | May 20328yr NC3 |
| CouponSpread vs US Treasuries | 8.000%(T + 353 bps) |
| Yield to Worst (8/6/26)Spread vs US Treasuries | 6.200%(T + 192 bps) |
Ratings: S&P / Moody's at pricing.
Sources: S&P Global Ratings research update dated 5/6/24; Latham & Watkins announcement dated 5/8/24
Case studies are prepared by Trackhawk Advisors from the sources cited on each page. They are for information only and are not investment advice or a recommendation to buy or sell any security.
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