Avis Budget Group Prices $700 Million in Senior Notes
On September 10, 2024, Avis Budget Group, Inc. (NASDAQ: CAR) announced that it has priced a private offering of $700 million in senior notes carrying a 8.250% coupon. The transaction was upsized by $200 million from earlier expectations. The issuer entities for the offering are the company’s wholly owned subsidiaries, Avis Budget Car Rental, LLC and Avis Budget Finance, Inc.
Notes Overview and Key Terms
The notes will mature on January 15, 2030. Closing is expected to occur soon, subject to customary closing conditions. They will be issued at par (i.e., at 100% of face value) and will be supported by the company, with guarantees provided by certain subsidiaries. Together, these terms aim to offer clarity and consistency to investors over the life of the notes.
Planned Use of Proceeds
Avis Budget Group intends to use the net proceeds for general corporate purposes. Specifically, the company plans to repay existing borrowings, including its floating rate term loan due in 2029, and to address outstanding fleet-related financing obligations. A portion of the funds will also go toward fees and expenses connected with these transactions. In aggregate, these actions are designed to simplify the capital structure and reinforce the company’s financial flexibility.
Offering and Eligibility
The notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act. Outside the United States, the offering will be made in compliance with Regulation S. The notes and the related guarantees have not been registered under U.S. or any other securities laws and will not be registered. As a result, they may not be offered or sold in the United States without registration or an applicable exemption from registration.
About Avis Budget Group
Avis Budget Group is a global mobility company operating under the Avis and Budget brands, with approximately 10,250 rental locations across nearly 180 countries. The company also operates the Zipcar brand in car sharing. It runs most of its car rental locations directly in North America, Europe, and Australasia, while working with licensees in other regions. The company’s headquarters are in Parsippany, N.J.
Investor Relations and Media Contacts
For investor questions, please contact David Calabria at IR@avisbudget.com. For media inquiries, reach James Tomlinson at ABGPress@edelman.com.
Frequently Asked Questions
How much is Avis Budget Group raising through this note offering?
The company is raising $700 million in senior notes, an increase of $200 million from earlier plans.
What is the interest rate on the notes?
The notes carry an annual interest rate of 8.250%.
When do the notes mature?
The notes mature on January 15, 2030.
What will the company do with the proceeds?
Proceeds are expected to be used for general corporate purposes, including repaying existing debt—such as the floating rate term loan due in 2029—addressing fleet financing obligations, and paying related fees and expenses.
Who is eligible to purchase these notes?
The notes are being offered to qualified institutional buyers under Rule 144A and, outside the U.S., in compliance with Regulation S. They aren’t registered and can’t be sold in the United States without registration or a valid exemption.
