PENSKE AUTOMOTIVE GROUP, INC. (Form: 8-K, Received: 08/01/2017 16:33:33)

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):	August 1, 2017

Penske Automotive Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware	1-12297	22-3086739
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

2555 Telegraph Road, Bloomfield Hills, Michigan		48302
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:		248-648-2500

	Not Applicable
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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

On August 1, 2017, we agreed to issue and sell $300 million in aggregate principal amount 3.75% Senior Subordinated Notes due 2020 (the “Notes”) together with related guarantees by our domestic wholly owned subsidiaries (the “Guarantees” and, together with the Notes, the “Securities”) pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”).

The $300 million aggregate principal amount of Securities are expected to be issued on August 15, 2017, subject to customary closing conditions. We intend to use the net proceeds to repay amounts currently outstanding under our U.S. credit agreement and for general working capital purposes.

On August 1, 2017, we filed with the SEC a Prospectus Supplement dated August 1, 2017 in connection with the public offering of the Notes. A final Prospectus Supplement will be filed with the SEC within the time period required by U.S. securities laws and SEC rules.

Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation have provided their consent to the issuance of the Notes through a second amendment to our U.S. credit agreement (the “Amendment”), which also provides additional covenant flexibility. Additionally, on July 31, 2017, the term of the U.S. credit agreement was extended by one year through September 30, 2020 pursuant to its “evergreen” provision.

We purchase motor vehicles from Daimler AG and Toyota Motor Credit Corporation, affiliates of the respective lenders under the U.S. credit agreement, for sale at certain of our dealerships. The lenders also provide certain of our dealerships with “floor-plan” and consumer financing.

A copy of the press release announcing the pricing of the $300 million aggregate principal amount of Securities is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

4.1 Second Amendment to Fifth Amended and Restated Credit Agreement dated August 1, 2017 among us, Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation.

99.1 Press Release

SIGNATURES

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.


	Penske Automotive Group, Inc.

August 1, 2017	By:	/s/ Shane M. Spradlin
		Name: Shane M. Spradlin
		Title: Executive Vice President

Exhibit Index


Exhibit No.		Description
4.1		Second Amendment to Fifth Amended and Restated Credit Agreement dated August 1, 2017 among us, Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation.
99.1		Press Release.

CONSENT AND SECOND AMENDMENT TO
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

This CONSENT AND SECOND AMENDMENT, dated as of August 1, 2017 (this “ Amendment ”), is to the Fifth Amended and Restated Credit Agreement (as heretofore amended, the “ Credit Agreement ”), dated as of May 1, 2015 among PENSKE AUTOMOTIVE GROUP, INC., a Delaware corporation (the “ Company ”), various financial institutions party thereto (the “ Lenders ”) and MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as agent for the Lenders (the “ Agent ”). Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as defined in the Credit Agreement (including as amended hereby).

WHEREAS, in accordance with the allowance of Subordinated Debt under Section 9.7(e)(ii) of the Credit Agreement, the Company intends to offer and sell up to $300,000,000 of senior subordinated notes due 2020 (the “ Proposed Notes ”) on the terms contained in the draft Description of Notes dated July 31, 2017 to be contained in the Prospectus Supplement of the Company relating to the Proposed Notes which has been made available to the Agent and the Lenders (the “ Description of Notes ”) in a registered offering (the “ Proposed Offering ”);

WHEREAS, the Agent and the Lenders have agreed to consent to the Proposed Offering as set forth herein; and

WHEREAS, the parties hereto also desire to amend the Credit Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

SECTION 1 CONSENT .

1.1 The Agent and the Lenders hereby consent to the Proposed Offering of the Proposed Notes on the terms and conditions of the Description of Notes and approve the subordination terms, payment terms, covenants, pricing and other terms of the Proposed Notes as set forth in the Description of Notes, subject to the following:

(a) the Agent and the Lenders reserve the right to approve the final indenture, notes and guarantees (each as defined in the Description of Notes) relating to the Proposed Notes and the Proposed Offering (with the understanding that the Agent and the Lenders acknowledge that the events of default described in the section of the Description of Notes entitled “Events of Default” are hereby approved and consented to by the Agent and the Lenders and that any terms contained in the final indenture, notes and guarantees that conform in substance to the descriptions of such terms in the Description of Notes are hereby approved and consented to by the Agent and the Lenders);

(b) the Proposed Notes must be issued and sold by the Company no later than August 31, 2017; and

(c) no Event of Default or Unmatured Event of Default shall have occurred or be continuing at the time of the closing of, or would result from, the Proposed Offering and no default shall exist or be caused by the issuance of the Proposed Notes under the Indenture, dated as of August 28, 2012, and the Indenture and First Supplemental Indenture, dated as of November 21, 2014, among the Company, various of the Company’s subsidiaries and The Bank of New York Mellon Trust Company, N.A., as trustee (and the Lenders shall have received evidence thereof in form and substance reasonably satisfactory to

them).

1.2 The Agent and the Lenders hereby acknowledge that the Company may repurchase and/or redeem any or all of the outstanding Subordinated Notes with the proceeds of the Proposed Notes so long as the requirements of clause (ii) of the proviso to Section 9.9 of the Credit Agreement are met.

1.3 This consent in this Section is limited expressly to its terms and shall not constitute a course of dealing with the Lenders or the Agent at variance with the Credit Agreement or any other Loan Documents or be construed to consent to, or waive, any breach or noncompliance with the Credit Agreement or any other Loan Document not specifically set forth above.

SECTION 2 AMENDMENTS . Effective on the Amendment Effective Date (defined below), the Credit Agreement shall be amended as follows:

2.1 Section 1.1 of the Credit Agreement shall be amended by amending and restating the definition of “Subordinated Notes” in its entirety to read as follows:

Subordinated Notes means (i) the 5.75% Senior Subordinated Notes due 2022 of the Company (and related guarantees) in the aggregate principal amount of $550,000,000, (ii) the 5.375% Senior Subordinated Notes due 2024 of the Company (and related guarantees) in the aggregate principal amount of $300,000,000, (iii) the 5.5% Senior Subordinated Notes due 2026 of the Company (and related guarantees) in the aggregate principal amount of $500,000,000, and (iv) the Senior Subordinated Notes due 2020 of the Company (and related guarantees) in the aggregate principal amount of up to $300,000,000.

2.2 Section 9.7 shall be amended by amending and restating clause (j) thereof in its entirety to read as follows:

(j) other Debt, in addition to the Debt listed above, of the Company and its Domestic Subsidiaries in an aggregate amount not at any time exceeding $100,000,000;

2.3 Section 9.7 shall be further amended by amending and restating clause (o) thereof in its entirety to read as follows:

(o) Real Estate Debt, provided that the aggregate outstanding principal amount of all Real Estate Debt of the Company and its Subsidiaries shall not exceed $350,000,000 at any time;

2.4 Schedule 9.7 shall be amended by amending and restating entries 5 and 9 thereof in their entireties to read as follows:

5. Obligations under the AUD$50.5 million working capital loan agreement and related guaranties, dated as of December 20, 2013, between the Company’s Australian subsidiaries, and Mercedes-Benz Financial Services Australia Ptv Ltd. as amended.

9. Letters of credit not to exceed $40 million.

SECTION 3 REPRESENTATIONS AND WARRANTIES . The Company represents and warrants to the Agent and the Lenders that: (a) the representations and warranties made in Section 8 of the Credit Agreement are true and correct on and as of the date hereof with the same effect as if made on and as of the date hereof (except to the extent relating solely to an earlier date, in which case they were true and correct as of such earlier date); (b) no Event of Default or Unmatured Event of Default exists or

will result from the execution of this Amendment; (c) no event or circumstance has occurred since the Effective Date that has resulted, or would reasonably be expected to result, in a Material Adverse Effect; (d) the execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Credit Agreement as amended hereby (as so amended, the “ Amended Credit Agreement ”) (i) are within the corporate powers of the Company, (ii) have been duly authorized by all necessary corporate action, (iii) have received all necessary approval from any governmental authority and (iv) do not and will not contravene or conflict with any provision of any law, rule or regulation or any order, decree, judgment or award which is binding on the Company or any of its Subsidiaries or of any provision of the certificate of incorporation or bylaws or other organizational documents of the Company or of any agreement, indenture, instrument or other document which is binding on the Company or any of its Subsidiaries; and (e) the Amended Credit Agreement is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

SECTION 4 CONDITIONS TO EFFECTIVENESS . This Amendment shall become effective as of the date when the following conditions precedent have been satisfied, each in form and substance satisfactory to the Agent (the “ Amendment Effective Date ”):

4.1 Amendment . The Agent shall have received a counterpart of this Amendment duly executed by the Company and the Required Lenders (or, in the case of any party other than the Company from which the Agent has not received a counterpart hereof, facsimile confirmation of the execution of a counterpart hereof by such party).

4.2 No Default . No Event of Default or Unmatured Event of Default shall have occurred and be continuing or would result from the transactions contemplated by this Amendment .

4.3 Representations . The representations and warranties of the Company and each Subsidiary set forth in the Credit Agreement and the other Loan Documents shall be true and correct in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

SECTION 5 MISCELLANEOUS .

5.1 Continuing Effectiveness, etc . As hereby amended, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. All references in the Credit Agreement, the Notes, each other Loan Document and any similar document to the “Credit Agreement” or similar terms shall refer to the Credit Agreement as amended hereby.

5.2 Counterparts . This Amendment may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment.

5.3 Expenses . The Company agrees to pay the reasonable costs and expenses of the Agent and the Lenders in connection with the preparation, execution and delivery of this Amendment.

5.4 Severability of Provisions . In the event that any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

5.5 Section Headings . The various headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Credit Agreement or any provision hereof or thereof.

5.6 Governing Law . This Amendment shall be a contract made under and governed by the laws of the State of New York applicable to contracts made and to be wholly performed within the State of New York.

5.7 Successors and Assigns . This Amendment shall be binding upon the Company, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent.

5.8 Loan Document . This Amendment is a Loan Document.

[Signatures Immediately Follow]

Delivered as of the day and year first above written.

PENSKE AUTOMOTIVE GROUP, INC. , as Company

By: /s/ J.D. Carlson

Name: J.D. Carlson

Title: EVP & CFO

MERCEDES-BENZ FINANCIAL SERVICES USA LLC , as Agent and as a Lender

By: /s/ Michele Nowak

Name: Michele Nowak

Title: Credit Director, National Accounts

TOYOTA MOTOR CREDIT CORPORATION ,
as a Lender

By: /s/ Willemien Steensma

Name: Willemien Steensma

Title: National Accounts Manager

Signature Page to Consent and Second Amendment

PENSKE AUTO LOGO_GRAD

Press Release

Penske Automotive Group, Inc.,

2555 Telegraph Rd.

Bloomfield Hills, MI 48302

FOR IMMEDIATE RELEASE

Press Release

Penske Automotive Group Announces Pricing Of $300.0 Million Senior Subordinated Notes

BLOOMFIELD HILLS, Mich., August 1, 2017 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE: PAG), an international transportation services company, today announced the pricing of $300.0 million aggregate principal amount of fixed rate Senior Subordinated Notes due 2020 (the “2020 Notes”) at 3.75%. The sale of the 2020 Notes, which is subject to customary closing conditions, is expected to be completed on August 15, 2017.

The company intends to use the net proceeds of this offering to repay amounts currently outstanding under the company's U.S. credit agreement and for general working capital purposes.

This offering is being made solely by means of a prospectus supplement and accompanying prospectus, which has been filed with the SEC. A copy of the prospectus for the offering may be obtained on the SEC's website, www.sec.gov. Alternatively, you may request it by contacting J.P. Morgan Securities LLC at c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NJ 11717 or call 866-803-9204 or Merrill Lynch, Pierce, Fenner & Smith Incorporated at dg.prospectus—requests@baml.com or calling toll-free 1-800-294-1322 or U.S. Bancorp Investments, Inc., 214 N. Tyron St., 26th Floor, Charlotte, NC 28202 or call 612-336-7604 or Wells Fargo Securities, LLC at Attn: Client Support, 608 2nd Avenue, South Minneapolis, MN 55402, calling toll-free at 1-800-645-3751, Option 5 or by emailing wfscustomerservice@wellsfargo.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, and shall not constitute an offer, solicitation or sale in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

Safe Harbor Statement

This press release contains forward-looking statements regarding the company's proposed offering of the 2020 Notes. The forward-looking statements in this release are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different. These factors include, but are not limited to, successful negotiation of definitive documentation for the financing arrangement and satisfaction or waiver of all conditions to closing. The consummation of the transaction may also be impacted by the other risks and uncertainties detailed in the company's filings with the

SEC. While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

About Penske Automotive

Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. PAG employs more than 25,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information visit the company’s website at www.penskeautomotive.com.

Inquiries should contact:


J.D. Carlson	Anthony R. Pordon
Executive Vice President and	Executive Vice President Investor Relations
Chief Financial Officer	and Corporate Development
Penske Automotive Group, Inc.	Penske Automotive Group, Inc.
248-648-2810	248-648-2540
jcarlson@penskeautomotive.com	tpordon@penskeautomotive.com

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