Inchcape PLC on Friday said that it plans to issue a public benchmark bond in order to re-finance its existing bridge facility, which helped to fund its acquisition of Derco.

The global automotive distributor expects marketing for the offering to start at the end of this month, with pricing announced shortly after. BNP Paribas and MUFG have been mandated as global coordinators, while NatWest Markets and Santander will take the role of joint active bookrunners.

The bond offering is intended to refinance its bridge facility, which expires at the end of the financial year. The facility was taken out to fund Inchcape’s £1.3 billion Derco buy in January.

Derco is Latin America’s largest independent automotive distributor.

Inchcape also said on Friday that it has been assigned a debut public investment grade rating by Moody’s of Baa2, or stable.

Moody’s said that Inchcape’s credit quality benefits from its conservative capital allocation framework. It added that the company ‘has a multi-year track record of solid cash flow generation, and of taking action to preserve its excellent liquidity’.

Moody’s also said that the company’s profit in financial 2023 and 2024 would benefit from its Vehicle Lifecycle Services initiatives and the synergies from Derco, though it expected implementation costs to largely offset initial gains.

‘We are delighted to have obtained a strong debut public investment grade rating of Baa2 (stable) from Moody’s, which reflects our strong track record of delivery, our differentiated market position and our compelling growth strategy,’ said Inchcape Chief Financial Officer Adrian Lewis.

Inchcape shares were trading 2.0% lower at 760.00 pence each in London on Friday afternoon.

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