The value of small cap stock for Sonic Automotive Inc. (NYSE:SAH) rose during trading on Tuesday, as the company benefited from news that it had received a 'B+' rating from Standard & Poor's Ratings Services for its proposed $200 million senior subordinated offering.
Reuters reported that the company's stock rose after it was given this rating by S&P, as the expected rate of recovery put forth by the financial institution signaled that investors would make significant gains.
The financial institution raised its rating on the company for a number of reasons, as it suggested that the proceeds from sales of subordinated offerings would result in more money than initially thought.
According to a company release, the automotive retailer announced that the notes were priced at 99.1 percent of the principal amount, resulting in a yield to maturity of 7.12 percent. Since the offer closes on July 2, the value of Sonic Automotive shares may rise even further.
Shares of the company's stock rose $1.01 to $13.17, an increase of 8.3 percent at 1:47 p.m. on June 26.
