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Dealers measuring market for window to bring Avis Europe bonds
By Paul A. Harris and Sara Rosenberg
Portland, Ore., Sept. 6 - Dealers are measuring the market, looking for a window through which to launch bonds backing Avis Budget Group's acquisition of Avis Europe plc, market sources say.
Meanwhile Avis Budget's $900 million of incremental senior secured credit facility debt (BB) is still being syndicated as investors are awaiting the release of revised price talk.
Morgan Stanley & Co., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc. and RBS Securities Inc. are the leads on the bank deal.
Proceeds from Avis' new bonds and loans will be used to help fund the acquisition of Avis Europe plc 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.
A commitment for the debt needed by Avis for the Avis Europe acquisition was actually obtained in June, as the company entered into agreements for roughly $1.4 billion in financing comprised of an up to €694 million senior secured interim loan and an up to $400 million senior unsecured interim loan.
The senior secured seven-year interim loan is priced at Euribor plus 700 basis points with a 1.5% floor, and the senior unsecured five-year interim loan is priced at Libor plus 900 bps with a 1.5% Libor floor.
The availability of the interim loans is subject to the completion of the acquisition of Avis Europe and may be used to fund the purchase and refinance existing Avis Europe debt.
However, the company does not plan to borrow the interim loans. Instead it hopes to complete its proposed credit facility and bond deals.
Parsippany, N.J.-based Avis Budget and Bracknell, England-based Avis Europe are vehicle rental companies.
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