Group 1 Halves Borrowing Capacity With Ford To $150 Million

   DOW JONES NEWSWIRES 
 

Auto retailer Group 1 Automotive Inc. (GPI) halved its borrowing capacity under its credit line with Ford Motor Credit Co. to $150 million, because of lower sales volumes.

The auto industry has been slammed in recent months as consumers slash spending and eschew big-ticket items like automobiles. The credit line provides financing for new vehicle inventory made by Ford Motor Co. (F), the only one of the U.S.'s Big Three auto makers that hasn't filed for bankruptcy.

Group 1 Chief Financial Officer John C. Rickel said, "With Group 1's shift to import and luxury brands over the last few years, Ford-manufactured vehicles now represent about half of the volume they did for us in 2005."

The company said the reduction in the credit facility was at Ford Motor Credit's request to reduce its inventory commitment. It added the line's terms are unchanged.

In March, Moody's Investors Service lowered its credit rating on Group 1 to speculative territory, reflecting concerns about debt from recent acquisitions and share repurchases and the worsening outlook for car dealerships.

Group 1's shares closed Friday at $20.30 and haven't traded premarket.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]