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Avis Budget reveals talk on $900 million credit facility with launch
By Sara Rosenberg
New York, Aug. 4 - Avis Budget Group Inc. came out with price talk on its $900 million in incremental senior secured credit facility debt as the deal launched with a bank meeting on Thursday afternoon, according to a market source.
The $200 million term loan A and $300 million revolver add-on are talked at Libor plus 300 basis points (subject to a ratings-based grid) with no Libor floor, and the $400 million term loan B is talked at Libor plus 350 bps with a 1.25% Libor floor and an original issue discount of 99, the source said.
The term loan B has 101 soft call protection for one year.
The revolver and term loan A are being sold as a strip in a 1:1 ratio, the source added.
Commitments are due on Aug. 18.
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.
Proceeds will be used to help fund the acquisition of Avis Europe plc for £3.15 in cash per share. The transaction is valued at £635 million, 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 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 provided 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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