8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 22, 2009

Group 1 Automotive, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-13461	76-0506313
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
800 Gessner, Suite 500, Houston, Texas		77024
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 713-647-5700

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On June 22, 2009, Group 1 Automotive, Inc. (the "Company") announced that it voluntarily reduced the borrowing capacity under its credit arrangement with Ford Motor Credit Company (the "FMCC Facility") from $300 million to $150 million in vehicle inventory financing. There were no changes to the terms or pricing of the FMCC Facility, which provides financing for our new vehicle inventory manufactured by Ford Motor Company and its affiliates. The terms of the FMCC Facility are subject to review annually.

All of our Ford and Lincoln Mercury dealership subsidiaries are obligors under the FMCC Facility. The Company and each of our Ford and Lincoln Mercury dealership subsidiaries guarantees the obligations of each other subsidiary party thereto. Our obligations under the FMCC Facility are secured by liens on all motor vehicle inventory financed under the FMCC Facility, as well as proceeds from the sale thereof. The FMCC Facility also contains events of default, including non-payment of obligations. T he individual loan agreements to which each subsidiary borrower is a party are cross-defaulted to each other and our Revolving Credit Facility. Upon the occurrence of an event of default, we could be required to immediately repay the amount outstanding under the FMCC Facility.

A copy of the press release is attached as Exhibit 99.1 to this Current Report.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

99.1 Press Release of Group 1 Automotive, Inc., dated as of June 22, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Group 1 Automotive, Inc.
June 22, 2009	By:	Darryl M. Burman
		Name: Darryl M. Burman
		Title: Vice President

Exhibit Index

Exhibit No.	Description
99.1	Press release of Group 1 Automotive, Inc., dated as of June 22, 2009.

EX-99.1

NEWS RELEASE
		800 Gessner • Suite 500 • Houston, TX 77024
AT GROUP 1:	President and CEO		Earl J. Hesterberg	(713) 647-5700
	Senior Vice President and CFO		John C. Rickel	(713) 647-5700
	Manager, Investor Relations		Kim Paper Canning	(713) 647-5700
AT Fleishman-Hillard:	Investors		John Roper	(713) 513-9505
AT Pierpont Communications:	Media		Clint L. Woods	(713) 627-2223

FOR IMMEDIATE RELEASE
MONDAY, JUNE 22, 2009

GROUP 1 AUTOMOTIVE REDUCES FORD MOTOR CREDIT FINANCING CAPACITY TO ALIGN WITH BRAND SALES

Credit Commitment Lowered to $150 Million

HOUSTON, June 22, 2009 — Group 1 Automotive Inc. (NYSE: GPI), a Fortune 500 automotive retailer, today announced that it has reduced the borrowing capacity under its credit arrangement with Ford Motor Credit Company for floorplan financing to $150 million, from $300 million, with no change to the terms or pricing. This evergreen facility provides financing for new vehicle inventory manufactured by Ford Motor Company and its affiliates.

“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,” said John C. Rickel, Group 1’s senior vice president and chief financial officer. “Group 1, therefore, agreed to support Ford Motor Credit’s request to reduce their floorplan commitment level, as our inventory requirements for Ford vehicles going forward will be more-than-adequately covered by the $150 million capacity limit.”

About Group 1 Automotive Inc.
Group 1 owns and operates 99 automotive dealerships, 133 franchises, and 24 collision service centers in the United States and the United Kingdom that offer 31 brands of automobiles. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts.

Group 1 Automotive can be reached on the Internet at www.group1auto.com.

This press release contains “forward-looking statements,” which are statements related to future, not past, events. In this context, the forward-looking statements often include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the level of manufacturer incentives, (c) the future regulatory environment, (d) our ability to obtain an inventory of desirable new and used vehicles, (e) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (f) our cost of financing and the availability of credit for consumers, (g) our ability to complete acquisitions and dispositions and the risks associated therewith, (h) foreign exchange controls and currency fluctuations, and (i) our ability to retain key personnel. These factors, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K under the headings “Business—Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We urge you to carefully consider this information. We undertake no duty to update our forward-looking statements, including our earnings outlook.