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S&P cuts KAR debt, changes view to negative
S&P said it cut the rating on KAR Auction Services Inc.’s first-lien debt to BB- from BB and revised the outlook to negative from stable.
KAR is planning a partial refinancing to increase liquidity and repay its term loan. KAR wants a new revolver and term loan B.
“The negative outlook reflects our view that there is at least a one-in-three chance that KAR's credit metrics will remain elevated for the rating, resulting in weaker-than-expected credit metrics,” said S&P in a news release.
S&P also revised the recovery rating on the first-lien debt to 3 from 2. The recovery rating and the rating on the unsecured debt is unchanged at 5 and B+.
The agency affirmed the company’s BB- issuer rating.
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