CARMEL, Ind. -
KAR Auction Services said Friday that its $1.865 senior credit facility has been amended, while also revealing that the company has rolled out a cash tender for notes.
With regards to the senior credit facility amendment, officials noted: “The amendment will provide the company the flexibility to use cash on hand to redeem, repurchase, defease or otherwise prepay a portion of its outstanding notes in an aggregate principal amount, together with all accrued and unpaid interest and all fees, premiums, disbursements or expenses (including any dealer manager fees and expenses) incurred in connection with or related to such redemption, repurchase, defeasement or other prepayment of such outstanding notes, not to exceed $75 million.”
Moreover, in accordance with the agreement, KAR has prepaid an aggregate principal amount of $75 million to the outstanding amount on the term loan under the facility.
Continuing on, KAR discussed the cash tender offer in more detail.
Officials noted that it was for “an aggregate principal amount of its 10-percent Senior Subordinated Notes due 2015 and its 8.75-percent Senior Notes due 2014 such that the maximum aggregate principal amount of Notes purchased in the tender offer, together with applicable premiums paid in connection with the tender offer but excluding accrued and unpaid interest, will be $73,500,000.”
KAR sent Note holders an Offer to Purchase that explained the terms and conditions and also sent them a related Letter of Transmittal.
The company provided the following table detailing the offer:

 

CUSIP Number

Title of Security

Acceptance Priority Level

Aggregate Principal Amount Outstanding

Late Tender Offer Consideration

(1)

Early Tender Premium

(1)

Total Tender Offer Consideration

(1)

48238QAF2

10% Senior Subordinated Notes due 2015

1

$ 199,408,000

$ 1,050

$ 30

$ 1,080

48238QAE5

8¾% Senior Notes due 2014

2

$ 450,000,000

$ 1,013.75

$ 30

$ 1,043.75

 

(1) Per $1,000 principal amount of Notes accepted for purchase.

 

Officials explained that to be able to get the applicable Total Tender Offer Consideration, Note holders have to validly tender and not validly withdraw their Notes on or before 5 p.m. EST on Dec. 1, unless this date is pushed back.
“Holders of Notes who validly tender their Notes after the Early Tender Date and on or before the Expiration Date will be eligible to receive only the applicable Late Tender Offer Consideration, which is equal to the applicable Total Tender Offer Consideration minus the applicable Early Tender Premium, as set forth in the table above,” officials shared.
“In addition to the applicable Tender Offer Consideration, holders whose Notes are accepted for purchase in the tender offer will receive accrued and unpaid interest to, but excluding, the date on which the tender offer is settled, which currently is expected to be December 15, 2010,” they added.
The expiration on the tender offers is 11:59 p.m. (EST) on Dec. 14, assuming the deadline is not pushed back.
Per the Offer to Purchase guidelines, KAR stated that validly tender Notes are allowed to be withdrawn on or before 5 p.m. (EST) on Dec. 1, provided this date is not extended.
“The consummation of the tender offer is subject to the satisfaction of certain conditions as set forth in the Offer to Purchase,” KAR explained. “The company reserves the right, in its sole discretion, to waive any and all conditions to the tender offer with respect to one or both of the First Priority Notes and the Second Priority Notes (each a ‘tranche’ of Notes).”
Officials added: “The aggregate principal amount of each tranche of Notes that is purchased in the tender offer will be based on the Acceptance Priority Level for such tranche as set forth in the table above and subject to proration and other terms set forth in the Offer to Purchase.
“The company’s obligations to accept any Notes tendered and to pay the applicable consideration for them are set forth solely in the Offer to Purchase and the related Letter of Transmittal,” they continued.
“This press release is neither an offer to purchase nor a solicitation of an offer to sell any Notes. The tender offer is made only by, and pursuant to the terms of, the Offer to Purchase, and the information in this news release is qualified by reference to the Offer to Purchase and the related Letter of Transmittal,” KAR added. “Subject to applicable law, the company may amend, extend, waive conditions to or terminate the tender offer.”
Serving as the dealer manager for the tender offer is Goldman, Sachs & Co.
For questions, parties are asked to call Goldman, Sachs & Co. at (212) 902-5183 or phone the toll-free number at (800) 828-3182 (Attention: Liability Management Group).
Officials asked that calls regarding requests for copies of the Offer to Purchase, the related Letter of Transmittal and other related materials be made to the Information Agent and Depositary for the tender offer, which is Global Bondholder Services Corp.
The applicable phone numbers are as follows: (212) 430-3774 (for banks and brokers only) or (866) 294-2200 (for all others and toll-free).