S&P lowers KAR loans to BB-

Standard & Poor's said it lowered its issue-level ratings on KAR Auction Services Inc.'s new credit facility (consisting of a senior secured term loan B-3 due 2023 and a revolver due 2021) to BB- from BB and revised its recovery ratings on the facility to 3 from 2.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; upper half of the range) recovery in the event of a payment default.

At the same time, S&P lowered its issue-level rating on the company's existing $1.1 billion senior secured term loan B-2 due 2021 to BB- from BB and revised the recovery rating on the loan to 3 from 2. The 3 recovery rating indicates an expectation for meaningful (50%-70%; upper half of the range) recovery in the event of a payment default.

The agency said it is revising its ratings on the new credit facility because the company is upsizing it to $1.35 billion. KAR is undertaking this refinancing in order to extend its debt maturities and to provide additional financial flexibility. After the company completes its refinancing, S&P will withdraw all of its ratings on KAR Auction Services' term loan B due 2017 and revolving credit facility due 2019.

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