Group 1 Automotive Inc. has set up a $1.35 billion line of credit with a total of 21 financial institutions that could be expanded to $1.6 billion.
Group 1, the fourth largest dealership group in the U.S., intends to use $1.1 billion of the funds for inventory floorplan financing while the remaining $250 million is meant for acquisitions as well as other corporate purposes. This credit line is set to expire in 2016.
The industry is recovering and so Group 1 sought to make sure that its dealerships have the inventory as sales go up, according to the company’s treasurer Michael Welch. Group 1 is the owner and operator of 105 dealerships across the U.S. and Great Britain.
The financial institutions that are providing the line of credit include Toyota Motor Credit Corp.; BMW Financial Services; Mercedes-Benz Financial Services; and Nisan Motor Acceptance Corp.
Welch explained that Group 1’s previous credit facility that was secured in 2007 is scheduled to expire in March 2012.
Welch added that Group 1 wanted to establish the credit facility before the existing deal expired. Based in Houston, Tex., Group 1 is ranked fourth on the Automotive News list of the top 100 U.S. dealership groups. Last year, it had retail sales of 97,511 new units.