Avis Budget Group, Inc. announced today that its wholly-owned subsidiary, Avis Budget Car Rental, LLC, has priced an offering of $450 million aggregate principal amount of 9?% senior notes due 2018. The sale of the new notes is expected to be completed on or about March 10, 2010, subject to customary closing conditions. At such time, also subject to customary closing conditions, the Company expects to complete the proposed amendment to its senior credit facility, which, among other things, will reduce the maximum size of the facility to $1.5 billion and extend the maturities of approximately $1.25 billion by two years.
The notes were priced at 98.634% of par, will be senior unsecured obligations of Avis Budget Car Rental, LLC and will be guaranteed on a senior basis by Avis Budget Group, Inc. and certain of its domestic subsidiaries. Avis Budget Group intends to use the net proceeds of the offering, together with cash on hand, to help repay outstanding indebtedness on its floating rate term loan and for general corporate purposes. Including the effect of interest rate hedges, the floating rate term loan being repaid has an effective interest rate of approximately 9.2%.
The notes and the related guarantees will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act. The notes and the related guarantees have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
This press release shall not constitute an offer to sell nor the solicitation of an offer to buy the notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering memorandum.