Avis Budget Group, Inc. announced that its Avis Budget Rental car funding (AESOP) LLC subsidiary has completed an offering of $690 million of asset-backed bonds with a weighted average interest rate of approximately 2.2%, the lowest rate on a five-year, fixed rate ABS bond offering in the company’s history. 

The proceeds of the offering are expected to be used to refinance ABS debt maturing in 2013 that has a blended interest rate of approximately 5%. In the interim, the proceeds of the offering will be used to reduce outstanding ABS conduit debt. The offering provides for a loan-to-value, or advance, ratio of approximately 76%, nine points more than the ABS debt maturing in 2013.

“We are very satisfied with the terms of this offering, which will provide us with low-cost financing for the next five years,” said David B. Wyshner, Avis Budget Group Senior Executive Vice President and Chief Financial Officer. “We’ve reduced our vehicle-related interest expense as a percentage of revenue in 2012, and with this offering, we are well positioned to further reduce it in 2013.”