Group 1 Automotive, Inc. (NYSE: GPI) has closed a private placement of $1.25 billion in senior unsecured notes, according to a press release from the Houston-based automotive retailer.

The offering consists of two tranches: $625.0 million in 6.250% senior unsecured notes due 2032 and $625.0 million in 6.625% senior unsecured notes due 2035.

The company said it intends to use the net proceeds, along with cash on hand, to fund its previously announced acquisition of dealership assets and related real estate from Hennessy Automobile Companies, Inc. and certain of its affiliates. Pending the closing of that acquisition, Group 1 plans to use the proceeds to repay a portion of outstanding borrowings under its revolving credit facility.

Daniel McHenry, the company's Chief Financial Officer and CEO of UK Operations, said the offering "provides us with long-dated capital to fund the Hennessy Acquisition on attractive terms."

If the Hennessy acquisition is not completed by January 6, 2027, or upon certain other triggering events, Group 1 would be required to redeem all outstanding 2032 Notes at 100% of the initial issue price plus accrued and unpaid interest. In that scenario, the company said it would use remaining proceeds to repay borrowings under its revolving credit facility and for general corporate purposes.

The notes were sold to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act of 1933, and have not been registered under that act.