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Avis launches upsized $500 million five-year secured notes with 10½% coupon at 97 to yield 11.297%
By Paul A. Harris
Portland, Ore., May 5 – Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. launched an upsized $500 million offering of five-year senior secured notes (Ba2/BB-) with a 10½% coupon at 97 to yield 11.297% on Tuesday morning, according to market sources.
The issue size increased from $400 million.
The deal launched on top of coupon talk, with its discount set at the cheap end of the 97 to 98 price talk.
The notes come with two years of call protection. The first call premium increased to 75% of the coupon from 50%.
In a covenant change, the leverage triggers within the covenant relief availability date were changed to a “gross first-lien leverage test” from a “net first-lien leverage test.”
Books were scheduled to close mid-morning on Tuesday, and the deal is set to price and allocate later in the day.
Citigroup Global Markets Inc. is the lead bookrunner. Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays, Credit Agricole CIB and Scotia Capital (USA) Inc. are the joint bookrunners.
MUFG, RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc., BMO Capital Markets Corp., SMBC Nikko Securities America Inc., UniCredit Capital Markets LLC, BNP Paribas Securities Corp., Lloyds Securities Inc., Natixis Securities Americas LLC, NatWest Markets Securities Inc., SG CIB and U.S. Bancorp Investments Inc. are the co-managers.
In addition to the customary call structure, above, the issuer may redeem up to 40% of the notes at par plus 50% of the coupon for the first 120 days with proceeds of any loan received pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The notes also feature a two-year 40% equity clawback at par plus the coupon and a 101% poison put.
The Parsippany, N.J.-based vehicle rental company plans to use the proceeds, including the proceeds resulting from the $100 million upsizing of the deal, for general corporate purposes.
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