KAR Auction Services reduces size of notes tender, extends deadline

New York, Dec. 10 - KAR Auction Services, Inc. said it has reduced the size of its tender offer for its $425 million of 10% senior subordinated notes due 2015, $450 million of 8¾% senior notes due 2014 and $150 million of floating-rate senior notes due 2014, according to a company news release.

The maximum to be paid will now be $213.6 million, excluding interest, down from $276.8 million previously.

The early tender date is now 5 p.m. ET on Dec. 15, extended from 5 p.m. ET on Dec. 11. The expiration was moved back to 5 p.m. ET on Dec. 30 from 11:59 p.m. ET on Dec. 28.

KAR Auction Services announced the tender on Dec. 2.

It said the priority for buying notes would be the 10% senior subordinated notes first, followed by the 8¾% senior notes and then the floating-rate notes.

For each $1,000 principal amount, the company will pay $1,040 for the 10% notes, $1,020 for the 8¾% notes and $900 for the floating-rate notes.

In each case, the payout includes an early tender premium of $40 for each note tendered by the early tender time.

The consummation of the tender offer is subject to the consummation of the company's planned initial public offering of common stock and the receipt of tenders for at least $191.25 million of the 10% notes by the early tender time. If the latter condition is not satisfied, the company may decide to cancel the tender offer, waive the condition in whole or waive the condition in part.

If the company waives the condition in part, it will not purchase any 10% notes and will spend up to $49.975 million, reduced from the original $113,175,000, to purchase 8¾% notes and floating-rate notes.

Goldman, Sachs & Co. (212 357-4692 or 800 828-3182) and RBC Capital Markets Corp. (212 618-2205) are the dealer managers, and Global Bondholder Services Corp. (212 430-3774 or 866 470-4300) is the information agent and depositary.

KAR is the Carmel, Ind.-based holding company for Adesa, Inc., a provider of wholesale used vehicle auctions; Insurance Auto Auctions, Inc., a salvage auto auction company; and Automotive Finance Corp., a provider of floorplan financing to used vehicle dealers.

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