Avis Budget offers $250 million bonds backing Avis Europe acquisition

By Paul A. Harris

Portland, Ore., Sept. 13 - Avis Budget Group Inc. is expected to bring a $250 million offering of high-yield bonds to market soon, sources say.

The deal could come before the end of the week.

The bonds are part of the debt financing for Avis Budget's purchase of Avis Europe plc.

Details on the $420 million seven-year term loan B surfaced during a Tuesday investor call.

Morgan Stanley & Co., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc. and RBS Securities Inc. are leading the debt financing.

On Monday the company disclosed in an 8-K document filed with the Securities and Exchange Commission that it had entered into an agreement for a $20 million tranche A term loan and a $200 million revolver add-on for the acquisition.

Avis Budget is buying Avis Europe for £3.15 in cash per share. The transaction is valued at £635 million, or about $1 billion.

Closing is expected to take place in October, subject to Avis Europe shareholder approval, court approval and regulatory clearances.

Parsippany, N.J.-based Avis Budget and Bracknell, England-based Avis Europe are vehicle rental companies.

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