0001019849FALSE00010198492023-01-012023-01-01

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):January 1, 2023

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Voting Common Stock, par value $0.0001 per sharePAGNew York Stock Exchange

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 1.01 Entry into a Material Definitive Agreement.

On January 1, 2023, we entered into the Ninth Amendment (the “Amendment”) to our U.S. credit agreement with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation (as amended, the “U.S. Credit Agreement”) to decrease our non-use fee payable on available but unused credit commitments (other than commitments to issue letters of credit) from 0.30% per annum to 0.20% per annum.

The U.S. Credit Agreement provides for up to $800.0 million in revolving loans for working capital, acquisitions, capital expenditures, investments, and other general corporate purposes, and provides up to an additional $50.0 million of letters of credit. The U.S. Credit Agreement provides for a maximum of $150.0 million of borrowings for foreign acquisitions and expires on September 30, 2025. The interest rate on revolving loans is LIBOR plus 1.50%, subject to an incremental 1.50% for uncollateralized borrowings in excess of a defined borrowing base.

The U.S. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by substantially all of our U.S. subsidiaries and contains a number of significant operating covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay certain other indebtedness, pay dividends, create liens on assets, make investments or acquisitions, and engage in mergers or consolidations. We are also required to comply with specified financial and other tests and ratios, each as defined in the U.S. Credit Agreement, including a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity, and a ratio of debt to earnings before interest, taxes, depreciation, and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the U.S. Credit Agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed.

The U.S. Credit Agreement also contains typical events of default, including change of control, non-payment of obligations, and cross-defaults to our other material indebtedness. Substantially all of our U.S. assets are subject to security interests granted to the lenders under the U.S. Credit Agreement.

We purchase motor vehicles from affiliates of Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation for sale at certain of our dealerships. The lenders also provide us and certain of our dealerships with mortgage, “floor-plan”, and consumer financing.

The foregoing description of the Amendment is qualified in its entirety by references to the Amendment, a copy of which is filed as an exhibit and incorporated by reference herein.    

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits
    


Exhibit Index

Exhibit No. Description
4.1
104Cover Page Interactive Data File (formatted as inline XBRL).




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.
January 6, 2023
By:
/s/ Shane M. Spradlin
Name: Shane M. Spradlin
Title: Executive Vice President
Exhibit 4.1 NINTH AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT This NINTH AMENDMENT, dated as of January 1, 2023 (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, the parties hereto desire to amend the Credit Agreement in certain respects as set forth herein. 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 AMENDMENT. Subject to the terms and conditions hereof and subject to the satisfaction of the conditions precedent set forth in Section 3 of this Amendment, Section 5.1 of the Credit Agreement is hereby amended as follows: 5.1 Non-Use Fee. The Company agrees to pay to the Agent for the account of the Lenders a non-use fee (the “Non-Use Fee”) equal to 0.20% per annum (computed for the actual number of days elapsed on the basis of a year of 360 days) of an amount equal to the Commitments (other than Commitments to issue Letters of Credit) less the Total Outstandings. Such Non-Use Fees shall accrue from and including the Effective Date to and excluding the Termination Date and be payable in arrears (x) at all times prior to the Termination Date, on an annual basis for each year, on the 20th day of the next succeeding January and (y) on the Termination Date. Each Lender shall be entitled to receive such Lender’s Pro Rata Share of the Non-Use Fee. SECTION 2 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 3 EFFECTIVENESS. This Amendment shall be effective upon the Agent’s receipt of a fully executed copy hereof. SECTION 4 RATIFICATION. Except as expressly modified in this Amendment, all of the terms, provisions and conditions of the Credit Agreement and the other Loan Documents to which each Loan Party is a party, as heretofore amended, shall remain unchanged and in full force and effect and the Credit Agreement and each other Loan Document to which a Loan Party is a party are hereby ratified and confirmed in all respects. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or the Lenders under the Credit Agreement or any of the other Loan Documents, or constitute a waiver of any provision of the Credit Agreement or any of the other Loan Documents. This Amendment shall not constitute a course of dealing with the Agent or the Lenders at variance with the Credit Agreement or the other Loan Documents such as to require further notice by the Agent or the Lenders to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future. 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] 2 [Signature Page to Ninth Amendment] Delivered as of the day and year first above written. PENSKE AUTOMOTIVE GROUP, INC., as Company By: /s/ Aaron Michael Name: Aaron Michael Title: Executive Vice President MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as Agent and as a Lender By: /s/ Farrah Vaughn-Dixon Name: Farrah Vaughn-Dixon Title: Regional Dealer Credit Manager-National Accounts TOYOTA MOTOR CREDIT CORPORATION, as a Lender By: /s Gerald Jules Name: Gerald Jules Title: Senior Manager, National Accounts