CARMEL, Ind. — Given the current favorable market conditions, KAR Auction Services announced this morning that it intends to refinance a portion of its indebtedness to allow for a greater flexibility to prepay debt.

"The purpose of the planned refinancing is to extend the maturities of the existing debt and provide greater flexibility to prepay debt by taking advantage of current market conditions. The company intends to complete the planned refinancing only if these purposes can be achieved," the company revealed.

Basically, KAR is looking to refinance its existing debt with a new $1.5 billion Senior Secured Term Loan B and a $250 million Senior Secured Revolving Credit Facility.

"KAR will also utilize a portion of its cash on hand for the refinancing. The refinancing is expected to be leverage neutral, excluding fees and expenses of the refinancing transactions. The proceeds of the refinancing will be used to refinance the existing Senior Secured Revolving Credit Facility and Term Loan B, 10 percent Senior Subordinated Notes due 2015 and a portion of the 8.75 percent Senior Notes due 2014," management reported.

"The company's Floating Rate Senior Notes due 2014 will remain outstanding. The terms of the contemplated transactions are not yet final," officials added.

Management plans to conduct a conference call with current and potential new lenders this Thursday to discuss the proposed refinancing.