Avis Budget talks $400 million five-year notes with 10½% coupon at OID 97-98; pricing Tuesday

By Paul A. Harris

Portland, Ore., May 4 – Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. talked a $400 million offering of five-year senior secured notes (Ba2/BB-) with a 10½% coupon at 97 to 98 original issue discount, according to market sources.

Official talk came on top of initial talk, according to a New York-based bond trader.

Books were scheduled to close at 5 p.m. ET on Monday, and the deal is set to price and allocate on Tuesday morning.

Citigroup Global Markets Inc. is the lead bookrunner. Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays, Credit Agricole CIB and Scotia Capital (USA) Inc. are the joint bookrunners.

MUFG, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc., BMO Capital Markets Corp., SMBC Nikko Securities America Inc., UniCredit Capital Markets LLC, BNP Paribas Securities Corp., Lloyds Securities Inc., Natixis Securities Americas LLC, NatWest Markets Securities Inc., SG CIB and U.S. Bancorp Investments Inc. are the co-managers.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon.

The issuer may redeem up to 40% of the notes at par plus 50% of the coupon for the first 120 days with proceeds of any loan received pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The notes also feature a two-year 40% equity clawback at par plus the coupon and a 101% poison put.

The Parsippany, N.J.-based vehicle rental company plans to use the proceeds for general corporate purposes.

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