Genuine Parts boosts credit facility to $2 billion, extends term

Genuine Parts Company (NYSE:GPC), a distributor of automotive replacement parts with a market capitalization of $16.5 billion, has expanded its borrowing capacity and extended the maturity of its Unsecured Revolving Credit Facility, according to a recent SEC filing. The company entered into an amendment on Thursday to increase its credit line from $1.5 billion to $2 billion and to push back the facility’s maturity from October 30, 2026, to March 20, 2030. According to InvestingPro analysis, the company’s strong cash flows sufficiently cover its interest payments, suggesting strategic timing for this facility expansion.

The amendment involves major financial institutions, with JPMorgan Chase (NYSE:JPM) Bank, N.A. serving as the administrative agent, swing line lender, and letter of credit issuer. The credit facility also includes other lenders and parties, as detailed in the 8-K filing.

This strategic financial move provides Genuine Parts with enhanced liquidity and financial flexibility for the next five years. The increased credit line and extended term are indicative of the company’s ongoing efforts to strengthen its financial position and support its operational needs. With a current ratio of 1.16 and a debt-to-equity ratio of 1.4, InvestingPro data shows the company maintains reasonable leverage while trading near its 52-week low, suggesting potential value opportunity.

The specifics of this financial arrangement are outlined in the Amendment No. 5 to the Syndicated Facility Agreement, which was attached as an exhibit to the company’s 8-K filing.

Genuine Parts Company, headquartered in Atlanta, Georgia, is known for its supply chain services in the automotive sector, operating under the SIC code for Wholesale-Motor Vehicle Supplies & New Parts [5013].

Investors and stakeholders can refer to the full text of the amendment for a comprehensive understanding of the terms and conditions. The information disclosed in this article is based on the statements provided in the SEC filing.

In other recent news, Genuine Parts Co (GPC) reported mixed results for the fourth quarter of 2024. The company posted an earnings per share (EPS) of $1.61, slightly below the forecasted $1.64, but exceeded revenue expectations with $5.77 billion against a forecast of $5.73 billion. Despite the revenue beat, the company’s credit outlook was revised to negative by S&P Global Ratings due to increased leverage from acquisition activities. In 2024, GPC’s credit metrics deteriorated, with adjusted leverage rising to 4.5x, driven by over $1 billion spent on acquiring more than 500 stores. S&P Global expects GPC’s acquisition activity to moderate to around $300 million annually going forward.

The industrial segment saw a 2.1% decline in sales due to global manufacturing weaknesses, while the automotive segment remained flat. GPC is focused on restructuring efforts, anticipating expenses of $150 million to $180 million in 2025, down from $231 million in 2024, to improve efficiency. The company also announced a dividend increase for the 69th consecutive year, returning over $700 million to shareholders through dividends and share repurchases. Analysts from firms like Truist and JPMorgan have expressed interest in the company’s market share strategies and cost management plans, with GPC executives emphasizing ongoing investments in technology and innovation to navigate market challenges.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.