Moody's rates Europcar notes B2

Moody's Investors Service said it assigned a B2 (LGD 4, 57%) rating to the issuance of additional notes to the €250 million of 9¾% senior secured notes issued in July 2010 and due 2017 to be issued by EC Finance plc, a special purpose vehicle owned by a charitable trust and guaranteed by Europcar International SASU, a subsidiary of Europcar Groupe SA.

The outlook is stable.

Europcar's ratings reflect its strong brand and market position in the key European rental car markets, a solid degree of regional diversification enhanced by stable profit contributions from its global franchise network, margin protection from residual value risks of purchased cars due to a substantial degree of buyback agreements and solid financial flexibility, the agency said.

The ratings consider Europcar's limited absolute scale, its highly leveraged capital structure, its exposure to rising interest rates and to volatile fleet purchase conditions, and limited ability to sufficiently pass on cost inflation in the form of rising rental prices, the agency added.

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