KAR Auction Services finalizes term loan B-3 size at $1.35 billion

By Sara Rosenberg

New York, March 4 – KAR Auction Services Inc. firmed its seven-year term loan B-3 at $1.35 billion, the high end of revised talk of $1.15 billion to $1.35 billion and up from an initial size at launch of $1.15 billion, according to a market source.

Pricing on the term loan B-3 is Libor plus 350 basis points with a 0.75% Libor floor and an original issue discount of 99.

The loan has 101 soft call protection for one year.

Earlier in syndication, the spread on the term loan B-3 was reduced from talk of Libor plus 375 bps to 400 bps, and the discount finalized at the tight end of the 98.5 to 99 guidance.

Along with the term loan B-3, the company is getting a $300 million five-year revolver.

J.P. Morgan Securities LLC, Barclays, Goldman Sachs Bank USA, Fifth Third Securities Inc. and US Bank are the lead banks on the new debt (BB).

Proceeds will be used to refinance a term loan B-1 due March 2017, to term out revolver drawings and for general corporate purposes.

KAR is a Carmel, Ind.-based provider of vehicle auction services and a provider of floorplan financing to independent and franchise used vehicle dealers.

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