S&P rates Avis loan BB

Standard & Poor's said it assigned BB ratings to Avis Budget Car Rental LLC's proposed $200 million secured term loan A and $400 million term loan B.

The ratings were placed on CreditWatch with negative implications.

The recovery rating is 1, indicating 90% to 100% expected recovery in a default.

Avis Budget is the major operating subsidiary of Avis Budget Group Inc.

The agency also said it will maintain the BB rating and 1 recovery rating on Avis Budget's $1.5 billion secured revolver maturing in 2016.

The rating remains on CreditWatch, where we placed it with negative implications in June after the company announced its acquisition of Avis Europe plc, S&P said.

The company will use the proceeds from the increase in the revolver and the term loans, along with cash and other debt, for the planned $1.8 billion acquisition, including repayment of its debt. The transaction is expected to close in early October, S&P said.

The ratings assume the successful completion of the acquisition with the proposed terms, the agency said.

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