Avis Budget Group to launch $900 million credit facility on Thursday

By Sara Rosenberg

New York, Aug. 2 - Avis Budget Group Inc. is set to hold a bank meeting on Thursday at 3 p.m. ET to launch $900 million in incremental senior secured credit facility debt, according to a market source.

Morgan Stanley & Co. Inc., Citigroup Global Markets Inc., Credit Agricole Securities (USA) Inc., Scotia Capital (USA) Inc. and RBS Securities Inc. are the lead banks on the deal.

The debt consists of a $200 million term loan A, a $400 million term loan B and a $300 million revolver add-on, the source said.

Proceeds will be used to help fund the acquisition of Avis Europe plc for 3.15 pounds in cash per share. The transaction is valued at 635 million pounds, or about $1 billion.

Closing is expected to take place in October, subject to Avis Europe shareholder approval, court approval and regulatory clearances.

Upon the acquisition becoming effective, the combined Avis Budget and Avis Europe businesses will have annual revenues of about $7 billion and owned or licensed operations in more than 150 countries.

Avis has already completed on Aug. 1 an amendment to its existing credit facility to allow for the acquisition.

In addition, the amendment increased the consolidated leverage ratio by 0.50 for periods subsequent to Sept. 30, increased the maximum amount of incremental facilities by $385 million and obtained additional flexibility under the debt, lien and investment covenants.

Parsippany, N.J.-based Avis Budget and England-based Avis Europe are vehicle rental companies.

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