Fitch downgrades CAR

Fitch Ratings said it downgraded CAR Inc.'s long-term issuer default rating and senior unsecured rating to BB from BB+.

The outlook is negative.

The rating on CAR's $300 million 6% notes due 2021 and $500 million 6 1/8% notes due 2020 also were downgraded to BB from BB+.

The downgrades reflect the substantial and growing related-party transactions with CAR's affiliate UCAR Inc., which has a weak credit profile, Fitch explained.

The negative outlook reflects the rapidly changing regulatory and market environment in the industries in which CAR and UCAR operate, the agency said, and the risk that CAR's transactions with UCAR will remain high.

UCAR China became CAR's largest customer in 2015, Fitch said, and accounted for more than one-third of rental revenue.

But growth in the short-term rentals business began to slow down in 2015 as inexpensive rides offered by Didi and Uber began to lure customers away from traditional rental cars, the agency said.

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