Moody's downgrades Avis

Moody's Investors Service said it downgraded the ratings of Avis Budget Car Rental, LLC and its guaranteed subsidiaries including its corporate family rating to B2 from Ba3; the probability of default rating to B2-PD from Ba3-PD, the secured bank facility to Ba2 from Baa3, the senior unsecured notes to B3 from B1.

The agency also lowered Avis Budget Finance plc’s senior unsecured to B3 from B1. The speculative grade liquidity rating is lowered to SGL-4 from SGL-3. The ratings remain under review for downgrade.

“Avis' ratings, including the B2 CFR, reflect the considerable weakening of the company's liquidity position that will occur due to the coronavirus' impact on air-travel, car rental usage rates, and the used car market. Avis business is built around renting its cars, on-airport and off-airport, and being able to efficiently dispose of the rental fleet. Air travel, which has a very strong relationship to rental car utilization rates, has fallen by over 90% and we expect travel to remain weak through 2020,” said Moody’s in a press release.

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