Moody’s rates Europcar notes B3

Moody's Investors Service said it assigned a provisional B3 rating to the new €350 million senior secured notes due 2021 to be issued by EC Finance plc, a finance company within the Europcar Groupe SA. Europcar has a B3 corporate family rating and a B3-PD probability of default rating, its €324 million senior subordinated notes and €400 senior subordinated unsecured notes have Caa1 and Caa2 ratings, respectively, and its outlook is stable.

The note proceeds and €25 million of cash from the balance sheet will be used to repay the existing €350 million senior secured notes due 2017 and fund transaction expenses including the call premium.

Moody's noted that Europcar has experienced revenue growth over the last couple of quarters following a prolonged period of sales decline, and management expects revenues to increase for the second quarter compared to the same period last year driven by the good performance of the leisure segment.

However, that return to sustainable growth remains uncertain despite the more favorable macro-economic data published across most of the countries where Europcar operates, the agency said. In the first quarter of this year, for example, the company experienced a revenue decrease of 1.2% compared to the same period last year following an improved performance in the third and fourth quarters of 2013, Moody’s said.

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