Floorplan Notes Payable

3 Months Ended

Mar. 31, 2020

The Company’s floorplan notes payable consisted of the following (in millions):



	March 31, 2020			December 31, 2019
Revolving credit facility — floorplan notes payable	$	1,207.8		$	1,206.0
Revolving credit facility — floorplan notes payable offset account	(82.6		)	(106.8		)
Revolving credit facility — floorplan notes payable, net	1,125.1			1,099.1
Other non-manufacturer facilities	43.5			45.3
Floorplan notes payable — credit facility and other, net	$	1,168.6		$	1,144.4

FMCC facility	$	235.5		$	208.5
FMCC facility offset account	(0.2		)	(4.1		)
FMCC facility, net	235.4			204.5
Other manufacturer affiliate facilities	249.5			255.4
Floorplan notes payable — manufacturer affiliates, net	$	484.9		$	459.9

Floorplan Notes Payable - Credit Facility

Revolving Credit Facility

In the U.S., the Company has a $1.75 billion revolving syndicated credit arrangement with 22 participating financial institutions that matures on June 27, 2024 (“Revolving Credit Facility”). The Revolving Credit Facility consists of two tranches: (i) a $1.70 billion maximum capacity tranche for U.S. vehicle inventory floorplan financing (“Floorplan Line”) which the outstanding balance, net of offset account discussed below, is reported in Floorplan notes payable - credit facility and other, net; and (ii) a $349.0 million maximum capacity and $50.0 million minimum capacity tranche (“Acquisition Line”), which is not due until maturity of the Revolving Credit Facility and is therefore classified in Long-term debt - see Note 9 “Debt” for additional discussion. The capacity under these two tranches can be re-designated within the overall $1.75 billion commitment, subject to the aforementioned limits. The Acquisition Line includes a $100 million sub-limit for letters of credit. As of March 31, 2020 and December 31, 2019, the Company had $20.6 million and $23.6 million, respectively, in outstanding letters of credit.

The Floorplan Line bears interest at rates equal to the LIBOR plus 110 basis points for new vehicle inventory and LIBOR plus 140 basis points for used vehicle inventory. The weighted average interest rate on the Floorplan Line was 1.76% as of March 31, 2020, excluding the impact of the Company’s interest rate derivative instruments. The Acquisition Line bears interest at LIBOR or a LIBOR equivalent plus 100 to 200 basis points, depending on the Company’s total adjusted leverage ratio, on borrowings in U.S. dollars, Euros or British pound sterling. The Floorplan Line requires a commitment fee of 0.15% per annum on the unused portion. Amounts borrowed by the Company under the Floorplan Line for specific vehicle inventory are to be repaid upon the sale of the vehicle financed and in no case is a borrowing for a vehicle to remain outstanding for greater than one year. The Acquisition Line requires a commitment fee ranging from 0.15% to 0.40% per annum, depending on the Company’s total adjusted leverage ratio, based on a minimum commitment of $50.0 million less outstanding borrowings.

In conjunction with the Revolving Credit Facility, the Company has $4.5 million of related unamortized debt issuance costs as of March 31, 2020, which are included in Prepaid expenses and Other long-term assets in the Company’s Condensed Consolidated Balance Sheets and amortized over the term of the facility.

Offset accounts

Offset accounts consist of immediately available cash used to pay down the Floorplan Line and FMCC Facility, and therefore offset the respective outstanding balances in the Company’s Condensed Consolidated Balance Sheets. The offset accounts are the Company’s primary options for the short-term investment of excess cash.

Floorplan Notes Payable - Manufacturer Affiliates

FMCC Facility

The Company has a $300.0 million floorplan arrangement with FMCC for financing of new Ford vehicles in the U.S. This facility bears interest at a rate of Prime plus 150 basis points minus certain incentives. The interest rate on the FMCC Facility was 4.75% before considering the applicable incentives as of March 31, 2020.

Other Manufacturer Facilities

The Company has other credit facilities in the U.S., U.K. and Brazil with financial institutions affiliated with manufacturers for financing of new, used and rental vehicle inventories. As of March 31, 2020, borrowings outstanding under these facilities totaled $249.5 million, comprised of $109.6 million in the U.S., with annual interest rates ranging from less than 1% to approximately 5%, $126.0 million in the U.K., with annual interest rates ranging from approximately 1% to 4%, and $13.9 million in Brazil, with annual interest rates ranging from approximately 4% to 14%.