Avis Budget Group Announces Intention to Offer $350 Million of Senior Notes

Rhea-AI Summary

Avis Budget Group (NASDAQ: CAR) announced plans to offer $350 million in 5.75% senior notes due 2027. This move follows a previous issuance of $400 million in similar notes. The proceeds will primarily be used to redeem $100 million of existing 5.50% senior notes due 2023, with remaining funds allocated for general corporate purposes. The offering is targeted at qualified institutional buyers under Rule 144A, and the notes will not be registered under the Securities Act. Risks related to market conditions, including those stemming from the COVID-19 pandemic, may affect the offering.

Positive

• Offering $350 million in new senior notes may improve liquidity.
• Intended use of proceeds includes redeeming higher-interest debt (5.50% notes), potentially reducing interest expenses.

Negative

• Dependence on market conditions and investor appetite, which may affect the success of the offering.
• Ongoing uncertainties due to the COVID-19 pandemic may impact overall financial stability.

PARSIPPANY, N.J., Aug. 03, 2020 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) (the “Company”) announced today that its wholly-owned subsidiaries, Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. (together, the “Issuers”), intend, subject to market and other customary conditions, to offer $350 million aggregate principal amount of 5.75% senior notes due 2027 (the “Notes”) in a private offering. The Notes are being offered as additional notes under the Indenture, dated as of July 3, 2019, pursuant to which the Issuers previously issued $400 million aggregate principal amount of 5.75% Senior Notes due 2027.

The Notes will be guaranteed on a senior unsecured basis by Avis Budget Group, Inc. and certain of its U.S. subsidiaries.

The Company intends to use the net proceeds from the Notes offering to redeem the outstanding $100 million in aggregate principal amount of the Issuers’ 5.50% Senior Notes due 2023, with the remainder to be used for general corporate purposes.

The Notes and related guarantees are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. The Notes and related guarantees have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities. Any offers of the Notes will be made only by means of a private offering memorandum.

About Avis Budget Group
Avis Budget Group, Inc. is a leading global provider of mobility solutions, both through its Avis and Budget brands, which have more than 11,000 rental locations in approximately 180 countries around the world, and through its Zipcar brand, which is the world's leading car sharing network, with more than one million members. Avis Budget Group operates most of its car rental offices in North America, Europe and Australasia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group is headquartered in Parsippany, N.J.

Forward-Looking Statements
Statements regarding the Notes offering and the expected use of proceeds therefrom are “forward-looking statements” and are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. These risks and uncertainties include, but are not limited to, the ability to complete the offering on favorable terms, if at all, and general market conditions (including the COVID-19 pandemic and related economic impact) which might affect the offering. Additional information concerning these and other important risks and uncertainties can be found in the Company's filings with the Securities and Exchange Commission, including under the captions “Forward-Looking Statements” and “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the period ended June 30, 2020. The company undertakes no obligation to update any forward-looking statements to reflect subsequent events or circumstances.

Contact
David Calabria:
IR@avisbudget.com
PR@avisbudget.com

FAQ

What are Avis Budget Group's plans for the new senior notes offering?

Avis Budget Group intends to offer $350 million in 5.75% senior notes due 2027.

How will the proceeds from the new offering be used by Avis Budget Group?

The proceeds will be used to redeem $100 million of existing 5.50% senior notes due 2023 and for general corporate purposes.

What are the risks associated with Avis Budget Group's new senior notes offering?

The risks include market conditions and uncertainties due to the COVID-19 pandemic.

Who is eligible to purchase the new senior notes from Avis Budget Group?

The notes are being offered only to qualified institutional buyers in compliance with Rule 144A.

What is the maturity date for the new senior notes being offered by Avis Budget Group?

The senior notes will mature in 2027.