KAR Auction to launch $1.62 billion in term loans on Tuesday

By Sara Rosenberg

New York, May 12 – KAR Auction Services Inc. is scheduled to hold a lender call on Tuesday to launch $1,617,000,000 in term loans, according to a market source.

J.P. Morgan Securities LLC is the lead bank on the deal.

The debt consists of a $720 million term loan B-2 talked at Libor plus 225 basis points with a 0% Libor floor and an original issue discount of 99.875 to par, and an $897 million term loan B-3 talked at Libor plus 250 bps with a 0% Libor floor and a discount of 99.875 to par, the source said.

Proceeds will be used to reprice an existing term loan B-2 due 2021 from Libor plus 317.75 with a 0.75% Libor floor and an existing term loan B-3 due 2023 from Libor plus 350 bps with a 0.75% Libor floor.

As of Dec. 31, there was $1.08 billion outstanding under the term loan B-2 and $1.34 billion outstanding under the term loan B-3.

The repriced loans are smaller than the existing loans because the company plans to repay some of the existing debt with proceeds from a senior notes offering.

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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