LAD 4 ⅝ 12/15/27 Corp, LAD 3 ⅞ 06/01/29 Corp, LAD 4 ⅜ 01/15/31 Corp

Lithia Motors Inc.

Credit, Industrial/Transportation


Publicly traded companies mentioned herein: AutoNation Inc (AN), Ford Motor Co (F), Lithia Motors Inc (LAD), Tesla Inc (TSLA)

Highlights

The presenter is short the 2027, 2029 and 2031 senior notes from Lithia Motors Inc (LAD), an automotive dealer with a national brick and mortar presence. His thesis highlights the broader deterioration of auto demand in a recessionary environment worsened by an inability to make cost cuts. This should lead to margin deterioration, inventory accumulation, and negative equity on floorplan financing. Given these cumulative effects, the presenter expects worsening balance sheets that should harm the outlook on relevant bond opportunities.

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Idea Discussion

Commentor 1 - 2 weeks ago

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