Fitch drops Avis

Fitch Ratings said it has downgraded Avis Budget Car Rental LLC's issuer default ratings and outstanding debt ratings as follows and placed them on rating watch negative: Avis Budget Car's long-term issuer default rating to BB- from BB, senior secured debt to BB+ from BBB- and senior unsecured debt to B+ from BB- as well as Avis Budget Group's long-term issuer default rating to BB- from BB.

According to the agency, the downgrade reflects Avis' reduced funding flexibility given dislocations in the capital markets and financial guarantor space, exposure to suppliers Ford and General Motors and expectations for significantly higher funding costs amidst a cyclical downturn in the auto rental business.

While Avis has reduced its program cars in recent years, Fitch said it does remain heavily reliant on domestic original equipment manufacturers for rental car supply.

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