Capital Automotive Pays Down Debt Through $228M Notes

MCLEAN, VA-Capital Automotive REIT has made a multi-million-dollar move with the recent issuing of triple net-lease mortgage notes in a private offering. The Aaa and AAA-rated notes—rated by Moody’s Investors Service and Standard & Poor’s–account for $228 million and are secured by 50 of the REIT’s vehicle retail-sales facilities across the US. Credit Suisse First Boston Salomon Smith Barney served as underwriters for the transaction. Capital Automotive’s portfolio of 292 properties covers 28 states with the majority of holdings in major metropolitan markets.

“We continue to believe in minimizing interest rate risk by match-funding our balance sheet, and this transaction is further evidence of this strategy,” Capital Automotive senior vice president and CFO David S. Kay says. “The notes will allow us to term out our short-term debt at historic low interest-rate levels. As of the closing date, approximately 91% of our debt will be substantially match-funded with long- term leases.”