Lithia & Driveway (LAD) Announces Proposed Senior Notes Offering

Rhea-AI Summary

Lithia & Driveway (NYSE: LAD) has announced plans to offer $500 million in senior notes due 2030 through a private offering. The notes will be exclusively offered to qualified institutional buyers in the U.S. under Rule 144A and international investors under Regulation S of the Securities Act.

The company plans to use the proceeds to repay a portion of its outstanding revolving credit lines. The repaid amounts may be reborrowed for general corporate purposes, including acquisitions and working capital. The offering is subject to market conditions and the notes will not be registered under the Securities Act.

Positive

• Access to $500 million in new financing through senior notes
• Potential to reduce revolving credit line exposure
• Flexibility to reborrow for acquisitions and working capital

Negative

• Increased long-term debt obligation with 2030 maturity
• Additional interest expense burden from new notes

Insights

Financial Analyst

LAD's $500M notes offering will restructure debt but not increase leverage, primarily shifting from revolving to fixed-rate obligations.

Lithia & Driveway is planning a $500 million senior notes offering due 2030, representing a significant debt refinancing maneuver rather than an expansion of total leverage. The company explicitly states the proceeds will repay existing revolving credit facilities, indicating this is a strategic debt restructuring rather than new borrowing. This approach effectively converts short-term, potentially variable-rate debt into longer-term fixed obligations.

This refinancing offers several strategic advantages for LAD. First, it extends the company's debt maturity profile by locking in financing until 2030, reducing near-term refinancing risks. Second, given the private placement nature to qualified institutional buyers, this suggests the company is securing institutional-grade financing terms. Third, while revolving credit provides flexibility, these senior notes likely offer more favorable interest rates in today's environment, potentially reducing LAD's overall interest expense.

The mention that repaid amounts "may be reborrowed" for acquisitions signals LAD is maintaining financial flexibility for potential growth opportunities while simultaneously strengthening its balance sheet structure. This balanced approach to capital management indicates disciplined financial stewardship as the company positions itself for sustainable expansion in the automotive retail sector.

MEDFORD, Ore., Sept. 3, 2025 /PRNewswire/ -- Lithia & Driveway (NYSE: LAD) today announced that it intends to offer $500 million in aggregate principal amount of senior notes due 2030 (the "Notes") in a private offering (the "Private Offering") that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Private Offering is subject to market and other conditions. Lithia intends to use the net proceeds of the Private Offering to repay a portion of the borrowings outstanding under its revolving lines of credit. Such amounts may be reborrowed and used for general corporate purposes, including acquisitions and working capital.

The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act. The Notes have not been, and will not be, registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the rules promulgated thereunder.

This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Lithia & Driveway (LAD)

Lithia & Driveway (NYSE: LAD) is the largest global automotive retailer providing a wide array of products and services throughout the vehicle ownership lifecycle. Simple, convenient, and transparent experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies. We deliver consistent, profitable growth in a massive and unconsolidated industry. Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever and however consumers desire.

Forward-Looking Statements

Certain statements in this press release, and at times made by our officers and representatives, constitute forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify forward-looking statements by terms such as "project", "outlook", "target", "may", "will", "would", "should", "seek", "expect", "plan", "intend", "forecast", "anticipate", "believe", "estimate", "predict", "potential", "likely", "ensure," "goal", "strategy", "future", "maintain", and "continue" or the negative of these terms or other comparable terms. Examples of forward-looking statements in this press release include, among others, statements regarding the Private Offering.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. Therefore, you should not rely on any of these forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation:

• Future national and local economic and financial conditions, including as a result of inflation, governmental programs and spending, and public health issues;
• The market for dealerships, including the availability of stores to us for an acceptable price;
• Changes in customer demand and the electric vehicle landscape and the impact of evolving digital technologies;
• Changes in our relationship with, and the financial and operational stability of, OEMs and other suppliers, and vehicle delivery models;
• Changes in the competitive landscape, including through technology and our ability to deliver new products, services and customer experiences and a portfolio of in-demand and available vehicles;
• Risks associated with our indebtedness, including available borrowing capacity, interest rates, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms;
• The adequacy of our cash flows and other conditions which may affect our ability to fund capital expenditures, obtain favorable financing and pay our quarterly dividend at planned levels;
• Disruptions to our technology network including computer systems, as well as natural events such as severe weather or man-made or other disruptions of our operating systems, facilities or equipment;
• Government regulations and legislation; and
• The risks set forth throughout "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and in "Part II, Item 1A. Risk Factors" of our Quarterly Reports on Form 10-Q, and from time to time in our other filings with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

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SOURCE Lithia Motors, Inc.

FAQ

What is the size of Lithia & Driveway's (LAD) proposed senior notes offering?

Lithia & Driveway is offering $500 million in senior notes due 2030.

How will LAD use the proceeds from the senior notes offering?

LAD will use the proceeds to repay a portion of borrowings under its revolving lines of credit, with the ability to reborrow for general corporate purposes, acquisitions, and working capital.

Who can purchase LAD's new senior notes?

The notes are only available to qualified institutional buyers in the U.S. under Rule 144A and international investors under Regulation S of the Securities Act.

When will LAD's senior notes mature?

The senior notes will mature in 2030.

Are LAD's new senior notes registered under the Securities Act?

No, the notes will not be registered under the Securities Act and are being offered through a private offering exempt from registration requirements.