Moody's assigns Baa2 to ERAC notes

Moody's Investors Service said it assigned a Baa2 rating to ERAC Finance Co.'s proposed senior unsecured notes, which is unconditionally guaranteed by Enterprise Rent-A-Car Co.

The outlook is stable.

Proceeds are expected to be used to repay short-term debt.

Moody's said it lowered ERAC's rating in May to Baa2/stable from Baa1 in response to Enterprise's acquisition of Vanguard Car Rental Holding, LLC.

The agency said the downgrade reflects increased leverage from the transaction and integration risk. Despite the risks, Moody's said it expects the acquisition to strengthen Enterprise's position in the on-airport rental market.

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