Avis Budget Group Announces Pricing of $350 Million of Senior Notes

Rhea-AI Summary

Avis Budget Group (NASDAQ: CAR) announced a private offering of $350 million in 5.75% senior notes due 2027, priced at 92% of their face value. The offering is an addition to previously issued senior notes from July 2019, totaling $400 million. Proceeds will be used to redeem $100 million of existing 5.50% senior notes due 2023, with the remainder allocated for corporate purposes. The offering is intended for qualified institutional buyers and will close on August 6, 2020, subject to conditions.

Positive

• Issuance of $350 million in senior notes enhances liquidity.
• Strategic use of proceeds to redeem older, higher-cost debt improves financial structure.

Negative

• Notes priced at 92% of face value suggests potential market skepticism.
• Dependence on market conditions for successful offering could impact financial plans.

PARSIPPANY, N.J., Aug. 04, 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”), priced an offering of $350 million aggregate principal amount of 5.75% senior notes due 2027 (the “Notes”) in a private offering. The Notes will be issued 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 have a maturity date of July 15, 2027. The closing of the offering of the Notes is expected to occur on August 6, 2020, subject to customary closing conditions. The Notes were priced at 92% of their face value and 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 the details of Avis Budget Group's recent senior notes offering?

Avis Budget Group announced a $350 million offering of 5.75% senior notes due 2027, with a closing date expected on August 6, 2020.

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

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

What is the significance of the notes being priced at 92% of face value?

Pricing at 92% indicates potential concerns in the market regarding the issuer's creditworthiness.

Who are the intended buyers for the senior notes by Avis Budget Group?

The notes are being offered only to qualified institutional buyers under Rule 144A.