Moody's Revises Penske Automotive's Rating Outlook

Moody's revises Penske Automotive Group's rating outlook, reflecting auto sector's woes

Moody's Investors Service on Monday revised Penske Automotive Group Inc.'s rating outlook and placed two other auto companies' ratings on review for possible downgrade amid continued challenges facing car companies.
Moody's revised Penske Automotive's rating outlook to "Negative" from "Stable," reflecting worsening trends in automotive retail sales. These trends are expected to persist next year in the U.S. and U.K. for the automotive retailer, Moody's said.
"Penske's product mix does include a high proportion of luxury brands, and we are concerned that revenues could be adversely impacted as higher income and aspirational consumers show greater restraint in their spending in the current recessionary environment," Moody's said.
Shares of Penske declined 33 cents, or 4.5 percent, to $7.15.

Separately, Moody's placed Asbury Automotive Group Inc.'s "B1" corporate family and probability of default ratings on review for a possible downgrade, sending shares of the new and used automobile retailer down 61 cents, or 13.1 percent, to $4.06.
Moody's said Asbury's operating performance deteriorated in the third quarter, and prospects remain soft for at least the next year.
Moody's also placed Sonic Automotive Inc.'s "Ba3" corporate family and probability of default ratings on review for a possible downgrade, saying Sonic's credit metrics "will likely continue to deteriorate for the balance of 2008 and into 2009."
Shares of the auto retailer retreated 58 cents, or 14 percent, to $3.55.

Elsewhere in the automotive sector on Monday, Toyota Motor Corp. cut its earnings forecast and warned it will post an operating loss for the fiscal year through March.
That would mark the Japanese automaker's first loss since it started reporting results in 1941 and follows last week's news that General Motors Corp. and Chrysler LLC received a $17.4 billion lifeline from the federal government to ward off a major bankruptcy.

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