Avis ups term B to $420 million, lifts spread to Libor plus 525 bps

By Sara Rosenberg

New York, Sept. 13 - Avis Budget Group Inc. held a call on Tuesday afternoon to update details on its financing for the purchase of Avis Europe plc, at which time it was announced that the seven-year term loan B is now $420 million, up from $400 million, and pricing has been sweetened, according to a market source.

The B loan is talked at Libor plus 525 basis points with a 1.5% Libor floor and an original issue discount of 97 to 98, the source said, versus initial talk at launch in early August of Libor plus 350 bps with a 1.25% Libor floor and an original issue discount of 99.

As before, the term loan B has 101 soft call protection for one year.

Commitments are due on Sept. 22.

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

In addition, the company has entered into an agreement for a $20 million tranche A term loan and a $200 million revolver add-on for the acquisition.

Pricing on the tranche A term loan and revolver can range from Libor plus 275 bps to 325 bps based on ratings.

Under the agreement, Avis is buying Avis Europe 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.

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

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