Moody’s confirms KAR Auction

Moody's Investors Service said it confirmed KAR Auction Services, Inc. credit ratings, including the B1 corporate family rating and B1-PD probability of default rating, the Ba2 senior secured rating and the B3 senior unsecured rating.

Moody's affirmed the SGL-1 speculative grade liquidity rating.

The agency said the action assumes that about $1.2 billion in proceeds from the separation of IAA Spinco Inc.'s salvage business, which is expected to close in June 2019, will be used to pay down KAR's senior secured pre-payable debt.

“The reduction in revenue diversification, lower profitability and heightened exposure to economic cycles are credit negative and position KAR weakly in the B1 rating category,” Moody’s said in a news release.

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