S&P gives Avis Budget notes 6

Standard & Poor's said it assigned a 6 recovery rating to Avis Budget Car Rental LLC's (CCC+/developing) unsecured notes, indicating expectations of negligible recovery of principal in the event of a payment default.

Avis Budget Car Rental is a subsidiary of Avis Budget Group Inc. (CCC+/developing), the agency said, noting that the CCC- rating on the notes is two notches lower than the parent company's corporate credit rating, based upon its expectation that the current credit markets will continue to require higher collateralization for secured vehicle facilities, leaving less available for the unsecured lenders.

Also, a shift by Avis Budget to a higher percentage of risk vehicles in its fleet, combined with a soft automotive retail market, suggests that unsecured recoveries would be lower in the event of a payment default, S&P noted.

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