(Bloomberg) — American Car Center told employees the company closed its doors a day after it took a $222 million bond sale off the market, according to people familiar with the matter.
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The used-car retailer, which targets consumers regardless of their credit history, said in an email to employees Friday that the company is ceasing all operations and closing its Memphis, Tenn. , the people said. The head office employs approximately 288 people.
The closing email came a day after the company sent another message to staff saying management and advisers had worked with lenders to improve liquidity and continue operations, the people said. American Car Center, with more than 40 dealerships in 10 states, is owned by York Capital Management LLC.
A York Capital representative declined to comment, while Noah Hogan, American Car Center’s chief financial officer, did not respond to a question on his LinkedIn account. No one at the company’s headquarters could be reached for comment, and repeated phone calls to various dealers went unanswered.
The shutdown comes as more Americans fall behind on their car payments, and the emergency cycle is quickly accelerating.
Before the announcement, American Car Center had suspended a bond deal backed by subprime lending, citing market conditions, despite investors placing orders for the debt. The company had not borrowed in the asset-backed securities market for an entire year, with the first sale in 2018.
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