Avis Budget driving by with $500 million 7.25-year senior notes; initial talk low-8% area

By Paul A. Harris

Portland, Ore., Nov. 15 – Avis Budget Group, Inc. plans to price a $500 million offering of Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. senior notes due Feb. 15, 2031 (B1/BB-) in a Wednesday drive-by, according to market sources.

Initial guidance is in the low-8% area, a trader said.

The Rule 144A and Regulation S for life 7.25-year notes become subject to an initial call after three years at par plus 50% of the coupon. They feature a 40% equity clawback at par plus the full coupon during the non-call period and have a 101% poison put.

BofA Securities Inc., J.P. Morgan Securities LLC, RBC Capital Markets LLC, Truist Securities Inc. and SG Americas Securities LLC are the joint bookrunners.

MUFG Securities Americas Inc., Natixis Securities Americas LLC, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC are the co-managers.

The issuing entities are wholly owned subsidiaries of Parsippany, N.J.-based vehicle rental company Avis Budget Group, which plans to use the proceeds to redeem all of its 4½% senior notes due 2025 and to repay a portion of its floating-rate term loan C maturing in 2029, with the remainder to be used for general corporate purposes.

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