KAR Holdings (Adesa) lowers three-part note offer to $1.025 billion, shifts some funds to loan

By Paul A. Harris

St. Louis, April 11 - KAR Holdings, Inc. has downsized to $1.025 billion from $1.1 billion its three-part offering of high-yield notes, shifting $75 million of the financing to its bank loan, according to a market source.

Meanwhile the Westchester, Ill., automotive specialty salvage services provider set price talk and timing for the deal.

A $150 million tranche of seven-year senior floating-rate notes (B3/CCC), non-callable for two years, is talked at Libor plus 375 to 400 basis points.

A $450 million tranche of seven-year senior fixed-rate notes (B3/CCC), non-callable for three years, is talked at 8¾% to 9%.

Meanwhile a downsized $425 million tranche of eight-year senior subordinated notes (Caa1/CCC), non-callable for four years, is talked to price 125 bps behind senior fixed-rate notes. The subordinated notes offering was downsized from $500 million.

Books are set to close at 9 a.m. ET Friday. The notes are expected to price Friday afternoon.

Goldman Sachs & Co., Bear Stearns & Co., UBS Investment Bank and Deutsche Bank Securities are joint bookrunners for the Rule 144A with registration rights and Regulation S deal. GE Capital Markets and BMO Capital Markets are co-managers.

Proceeds, along with $1.79 billion of new bank debt, will be used to fund the acquisition of Adesa Inc. by Kelso, GS Capital, ValueAct Capital and Parthenon Capital for $27.85 per share.

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