DOW JONES NEWSWIRES
Auto retailer Group 1 Automotive Inc. (GPI) halved its borrowing
capacity under its credit line with Ford Motor Credit Co. to $150
million, because of lower sales volumes.
The auto industry has been slammed in recent months as consumers
slash spending and eschew big-ticket items like automobiles. The
credit line provides financing for new vehicle inventory made by
Ford Motor Co. (F), the only one of the U.S.'s Big Three auto
makers that hasn't filed for bankruptcy.
Group 1 Chief Financial Officer John C. Rickel said, "With Group
1's shift to import and luxury brands over the last few years,
Ford-manufactured vehicles now represent about half of the volume
they did for us in 2005."
The company said the reduction in the credit facility was at
Ford Motor Credit's request to reduce its inventory commitment. It
added the line's terms are unchanged.
In March, Moody's Investors Service lowered its credit rating on
Group 1 to speculative territory, reflecting concerns about debt
from recent acquisitions and share repurchases and the worsening
outlook for car dealerships.
Group 1's shares closed Friday at $20.30 and haven't traded
premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com