KAR Auction Services Inc.#s New Credit Facility Rated #BB# (Recovery Rating: #2#)

Stocks and Financial Services Press Releases Thursday February 25, 2016 10:21
NEW YORK--25 Feb--Standard & Poor's

NEW YORK (Standard & Poor's) Feb. 24, 2016--Standard & Poor's Ratings Servicestoday assigned its 'BB' issue-level rating and '2' recovery rating to KARAuction Services Inc.'s new credit facility (consisting of a senior securedterm loan B-3 due 2023 and a revolver due 2021). The '2' recovery ratingindicates our expectation for substantial (70%-90%; lower half of the range)recovery in the event of a payment default.

All of our other ratings on KAR are unchanged.
The company is undertaking this refinancing in order to extend its debtmaturities and to provide additional financial flexibility. KAR Auction's termloan B-2 due 2021 will remain outstanding.
After the company completes its refinancing, we will withdraw all of ourratings on KAR Auction Services' term loan B due 2017 and revolving creditfacility due 2019.

Our 'BB-' corporate credit rating on KAR is based on our aggressive assessmentof the company's financial risk profile, which reflects its positive butsomewhat volatile free operating cash flow. We assess the company's businessrisk profile as fair to reflect its established positions in the whole-car andsalvage auction markets, which are somewhat mitigated by its businessconcentration in North America and its strategic focus on growing throughacquisitions.

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