S&P: Avis Budget notes BB-

S&P said it assigned a BB- rating and 5 recovery rating to Avis Budget Group Inc.’s €250 million senior notes due 2025.

The 5 recovery rating indicates 10% to 30% expected default recovery.

Avis Budget Finance plc is issuing the notes.

The proceeds will be used to redeem its 6% senior notes due 2021, a portion of its floating-rate notes due 2017, pay fees and other related offering expenses and for general corporate purposes, S&P said.

The ratings also reflect the company’s position as one of the largest global car rental companies and the price-competitive and cyclical nature of on-airport car rentals, the agency said.

The ratings also consider the relatively stable cash flow that the company’s car rental business generates – even during periods of earnings weakness – and its substantial capital spending requirements, which it has the ability to reduce if industry or economic conditions warrant, S&P said.

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