Avis is in ‘strong’ financial position; no debt maturities until 2023

By Devika Patel

Knoxville, Tenn., Feb. 21 – Avis Budget Group, Inc. reported a “strong” financial position as of the end of the last quarter, and management says the company has no debt maturities until 2023, with most of its debt either fixed-rate or swapped for fixed.

“Our financial position remains strong,” interim chief financial officer Martyn Smith said Thursday on the company’s earnings conference call for the fourth quarter and year ended Dec. 31.

“We have no corporate debt maturities until 2023, and approximately 90% of our corporate debt is either a fixed rate or a swap for fixed, so our exposure to rising interest rates on our corporate debt is limited,” he said.

Adjusted EBITDA was a record $142 million in the fourth quarter and $781 million in the full year.

Adjusted free cash flow was $430 million for the year.

Corporate debt was about $3.55 billion at the end of the fourth quarter.

Cash and cash equivalents totaled $615 million as of Dec. 31. The company had about $4.1 billion of total liquidity as of the end of the quarter.

Net corporate leverage was 3.8x. The company targets a leverage range of 3x to 4x.

During 2018, the company amended the terms of its floating-rate term loan due 2022 and senior revolving credit facility maturing 2021 and extended the maturities to 2025 and 2023, respectively.

Avis also issued €350 million of 4¾% senior notes due January 2026, the proceeds of which were used to redeem all $400 million of its outstanding 5% senior notes due June 2022.

On Sept. 27, Avis Budget Finance plc priced a €350 million issue of 4¾% long seven-year senior notes at par to yield 4.751%.

The yield printed at the tight end of the 4¾% to 4 7/8% yield talk and tight to initial guidance in the high 4% area.

Joint bookrunners were Credit Agricole CIB, Barclays, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC.

The Parsippany, N.J.-based vehicle rental company earmarked the proceeds to redeem its 5 1/8% senior notes due 2022, with any remaining proceeds to be used for general corporate purposes.

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