Published on 4/13/2007 in the Prospect News High Yield Daily.
New Issue: KAR Holdings sells downsized $1.025 billion bonds in three parts
By Paul A. Harris
St. Louis, April 13 - KAR Holdings, Inc. priced a downsized $1.025 billion three-part offering of high-yield notes on Friday, according to a market source.
The Westchester, Ill., automotive specialty salvage services provider priced a $150 million tranche of seven-year senior floating-rate notes (B3/CCC) at par to yield three-month Libor plus 400 basis points, on the wide end of the Libor plus 375 to 400 bps price talk.
Meanwhile the company priced a $450 million tranche of seven-year senior fixed-rate notes (B3/CCC) at par to yield 8¾%, at the tight end of the 8¾% to 9% price talk.
In addition, KAR Holdings priced a downsized $425 million tranche of eight-year senior subordinated notes (Caa1/CCC) at par to yield 10%, on top of price talk that had the subordinated notes pricing 125 bps behind the senior fixed-rate notes. The subordinated note offering was downsized from $500 million, with $75 million of the financing shifted to the company's bank loan.
Goldman Sachs & Co., Bear Stearns & Co., UBS Investment Bank and Deutsche Bank Securities were joint bookrunners for the Rule 144A with registration rights and Regulation S deal. GE Capital Markets and BMO Capital Markets were 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.
| Issuer: | KAR Holdings Inc.
|
| Amount: | $1.025 billion (downsized from $1.1 billion with $75 million shifted to bank loan)
|
| Bookrunners: | Goldman Sachs & Co., Bear Stearns & Co., UBS Investment Bank, Deutsche Bank Securities Co-managers: | GE Capital Markets, BMO Capital Markets
|
| Trade date: | April 13
|
| Settlement date: | April 20
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
|
|
| Senior floating-rate notes
|
| Amount: | $150 million
|
| Maturity: | May 1, 2014
|
| Coupon: | Three-month Libor plus 400 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 400 bps
|
| Call features: | Callable on May 1, 2009 at 102, 101, par on and after May 1, 2011
|
| Equity clawback: | Until May 1, 2010 for 35% at par plus applicable coupon
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC
|
| Price talk: | Libor plus 375 to 400 bps
|
|
|
| Senior fixed-rate notes
|
| Amount: | $450 million
|
| Maturity: | May 1, 2014
|
| Coupon: | 8¾%
|
| Price: | Par
|
| Yield: | 8¾%
|
| Spread: | 403 bps
|
| Call features: | Callable on May 1, 2010 at 104.375, 102.917, 101.458, par on and after May 1, 2013
|
| Equity clawback: | Until May 1, 2010 for 35% at 108.75
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC
|
| Price talk: | 8¾% to 9%
|
|
|
| Senior subordinated notes
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| Amount: | $425 million (decreased from $500 million)
|
| Maturity: | May 1, 2015
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| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Spread: | 525 bps
|
| Call features: | Callable on May 1, 2011 at 105.0, 102.50, par on and after May 1, 2013
|
| Equity clawback: | Until May 1, 2010 for 35% at 110.0
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC
|
| Price talk: | 125 bps behind senior fixed-rate notes
|
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