S&P puts KAR on positive watch

S&P said it placed all its ratings for KAR Auction Services Inc., including its B- senior unsecured ratings, on CreditWatch with positive implications.

“The placement of our ratings on KAR on CreditWatch with positive implications follows the company's announcement to divest the Adesa U.S. physical auction assets for $2.2 billion ($1.65 billion net of taxes and transaction fees) with net proceeds directed to fully repay its $950 million senior notes and apply the remainder to pay down approximately $700 million of its senior secured term loan,” S&P said in a press release.

The CreditWatch indicates a possible upgrade once the deal closes if KAR uses the sale proceeds to repay debt for permanent leverage reduction, the agency said.

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