S&P gives Avis Budget notes B-

S&P said it assigned a B- issue-level and 6 recovery ratings to Avis Budget Car Rental LLC’s and Avis Budget Finance Inc.’s proposed $350 million of senior unsecured notes due 2027 and placed the issue-level rating on CreditWatch with negative implications. The 6 recovery rating indicates S&P’s expectation lenders would receive negligible (0%-10%; rounded estimate: 5%) recovery in the event of a default.

Parent Avis Budget Group Inc. will guarantee the notes

Proceeds will be used to redeem $100 million of the company’s 5˝% senior unsecured notes due 2023 and for general corporate purposes.

“We are also lowering our issue-level rating on the company’s existing senior unsecured debt to B- from B. The rounded recovery estimate is 5% (previously 10%), reflecting the higher amount of unsecured debt in the capital structure,” S&P said in a press release.

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