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Prospect News home > News index > List of issuers K > Headlines for KAR Auction Services, Inc. > News item |
S&P ups KAR unsecured rating to B
S&P said it raised the issue-level rating on KAR Auction Services Inc.’s senior unsecured debt to B from B- and revised its recovery rating to 4 (30%-50%; rounded estimate: 40%) from 5.
The upgrade follows KAR’s partial $600 million redemption of its $950 million of notes due 2025 using cash from the balance sheet during the third quarter of 2022.
“With a lower amount of unsecured debt, recovery prospects for unsecured debtholders improve in our hypothetical default scenario. Our BB- issue-level rating on KAR's revolver is unchanged,” S&P said in a press release.
KAR has been using the proceeds from the sale of its Adesa U.S. physical auction business to pay down debt. “However, the recent paydown is largely leverage neutral given the company used available cash on its balance sheet. For this reason, the debt paydown is not significant enough to affect our rating on the company,” S&P said.
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