On August 6, 2020, Avis Budget Car Rental, LLC and Avis Budget
Finance, Inc. (collectively, the “Issuers”), each a subsidiary of
Avis Budget Group, Inc. (the “Company”), issued $350 million
aggregate principal amount of 5.75% Senior Notes due 2027 (the “New
Notes”). The New Notes were issued as additional notes pursuant to
the First Supplemental Indenture, dated as of August 6, 2020,
to the Indenture, dated as of July 3, 2019 (the “Indenture”),
by and among the Issuers, the Company, the other guarantors party
thereto and Deutsche Bank Trust Company Americas, as trustee,
pursuant to which the Issuers previously issued $400 million
aggregate principal amount of 5.75% Senior Notes due 2027 (the
“Existing Notes” and, together with the New Notes, the “Notes”).
The New Notes will form part of the same series as the Existing
The Issuers used a portion of the net proceeds from the offering to
pay the redemption price in connection with the Issuers’ redemption
of the outstanding $100 million in aggregate principal amount
of their 5.50% Senior Notes due 2023 (the “2023 Notes”). In
connection therewith, the Issuers satisfied and discharged the
indenture governing the 2023 Notes. The redemption price will be
paid to holders of the 2023 Notes on September 2, 2020, the
redemption date. The Issuers intend to use the remainder of the net
proceeds from the offering for general corporate purposes.
The New Notes will mature on July 15, 2027 and bear interest
at a rate of 5.75% per annum, payable semi-annually in cash in
arrears on January 15 and July 15 of each year, beginning
on January 15, 2021. Interest on the New Notes will accrue
from July 15, 2020.
The New Notes will be guaranteed on a senior unsecured basis by the
Company, Avis Budget Holdings, LLC, and the Issuers’ existing and
future direct and indirect domestic subsidiaries that also
guarantee the Issuers’ senior credit facilities.
The Issuers may redeem all or part of the Notes at any time prior
to July 15, 2022 at a price equal to 100% of the aggregate
principal amount thereof, plus accrued and unpaid interest to the
redemption date, plus a make-whole premium. The Issuers may redeem
all or part of the Notes at any time on or after July 15, 2022
at the redemption prices set forth in the Indenture. At any time
prior to July 15, 2022, up to 40% of the aggregate principal
amount of the Notes may be redeemed with the net cash proceeds that
the Issuers raise in one or more equity offering, at the redemption
price specified in the Indenture.
Upon the occurrence of specified kinds of changes of control, the
Issuers must offer to repurchase the notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and
unpaid interest to the repurchase date.
The Indenture governing the Notes, among other things, limits the
ability of the Issuers and their restricted subsidiaries to
(i) pay dividends on or make other distributions in respect of
equity interests or make other restricted payments;
(ii) create liens on certain assets to secure debt;
(iii) make certain investments; (iv) sell certain assets;
(v) consolidate, merge, sell, or otherwise dispose of all or
substantially all of the Issuers’ assets; and (vi) designate
the Issuers’ subsidiaries as unrestricted subsidiaries. These
covenants are subject to a number of important limitations and
exceptions. The Indenture governing the Notes provides for
customary events of default (subject in certain cases to customary
grace and cure periods).
Financial Statements and Exhibits.