UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM i 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
i KAR Auction Services, Inc.
(Exact name of Registrant as specified in its charter)
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i Delaware
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i 20-8744739
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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i 11299 N. Illinois Street
i Carmel, i Indiana i 46032
(Address of principal executive offices)
(Zip Code)
( i 800) i 923-3725
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
i ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
i ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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i Common Stock, par value $0.01 per share
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i KAR
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i New York Stock Exchange
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Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth company i ☐
If an emerging growth company, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On
September 19, 2019, KAR Auction Services, Inc. (the “
Company”) entered into a Third Amendment Agreement (the “
Third Amendment”) to the Amended and Restated Credit Agreement, dated as
of
March 11, 2014 (as amended by that certain Incremental Commitment Agreement and First Amendment, dated
March 9, 2016, as amended by that certain Incremental Commitment Agreement and Second Amendment, dated
May 31, 2017, and as further amended by
the Third Amendment, the “
Credit Agreement”), by and among
the Company, JPMorgan Chase Bank, N.A., as administrative agent, certain
subsidiaries of
the Company party thereto and the several lenders and issuing lenders party thereto.
The Third Amendment provides for, among other things, (i) the refinancing of the existing tranche B-4 term loans and tranche B-5 term loans with new seven-year tranche B-6 term loans (the “Tranche
B-6 Term Loans”) in an aggregate principal amount of $950,000,000, (ii) repayment of all existing revolving loans and (iii) a five-year revolving credit facility in an aggregate principal amount of $325,000,000 (the “Revolving Facility”),
which refinances the previously existing revolving credit facility under the Credit Agreement. The Revolving Facility also includes a $50 million sub-limit for issuance of letters of credit and a $60 million sublimit for swing line loans, which can
be borrowed on same-day notice.
As set forth in the Credit Agreement, the Tranche B-6 Term Loans will bear interest at an adjusted LIBOR rate plus 2.25% or at
the Company’s election, Base Rate (as defined in the Credit Agreement)
plus 1.25%. Loans under the Revolving Facility will bear interest at a rate calculated based on the type of borrowing (either adjusted LIBOR or Base Rate) and
the Company’s Consolidated Senior Secured Net Leverage Ratio (as defined in the Credit
Agreement), with such rate ranging from 2.25% to 1.75% for adjusted LIBOR loans and from 1.25% to 0.75% for Base Rate loans.
The Company will also pay a commitment fee between 25 to 35 basis points, payable quarterly, on the average daily unused
amount of the Revolving Facility based on
the Company’s Consolidated Senior Secured Net Leverage Ratio, from time to time.
The Credit Agreement contains affirmative and negative covenants that are usual and customary for a senior secured credit agreement. The negative covenants include, among other things, limitations on
asset sales, mergers and acquisitions, indebtedness, liens, dividends, investments and transactions with
the Company’s affiliates. The Credit Agreement also requires
the Company to maintain a maximum Consolidated Senior Secured Net Leverage Ratio
not to exceed 3.50 to 1.00 as of the last day of each fiscal quarter (commencing with
December 31, 2019) on which any loans under the Revolving Facility are outstanding.
Certain of the lenders and agents and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking, commercial
banking and other services for
the Company and its affiliates, for which they received or will receive customary fees and expenses.
The foregoing description of the Third Amendment is qualified in its entirety by reference to the full text of the Third Amendment, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K
and which is
incorporated herein by reference.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Item 9.01. Exhibits.
(d) Exhibits
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Exhibit
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Description
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10.4
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Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
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Forward-Looking Statements
Certain statements contained in this Report include
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and
uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as
“should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “contemplates”
and similar expressions identify forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected,
expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those matters disclosed in
the Company’s Securities and Exchange Commission filings.
The Company
does not undertake any obligation to update any forward-looking statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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KAR AUCTION SERVICES, INC. |
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By:
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Executive Vice President and Chief Financial Officer
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