Item 8.01 Other Events
On February 28, 2024, Avis Budget Finance plc (the “Issuer”), a wholly-owned subsidiary of Avis Budget Group, Inc. (the “Company”), issued €600 million aggregate principal amount of 7.00% Senior Notes due 2029 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of February 28, 2024 (the “Indenture”), by and among the Issuer, the Company, the other guarantors party thereto, U.S. Bank Trust Company, National Association, as trustee, Elavon Financial Services DAC, as registrar and transfer agent, and Elavon Financial Services DAC, UK Branch, as paying agent.
The Issuer intends to use the net proceeds from the offering of the Notes to redeem all of the outstanding €350 million aggregate principal amount of the Issuer’s 4.750% Senior Notes due 2026 and pay fees and expenses in connection with the foregoing, with the remainder to be used for general corporate purposes, which may include, without limitation, repayment of indebtedness.
The Notes will mature on February 28, 2029 and bear interest at a rate of 7.00% per annum, payable semi-annually in cash in arrears on February 28 and August 31 of each year, beginning on August 31, 2024. Interest on the Notes will accrue from February 29, 2024.
The Notes are guaranteed on a senior unsecured basis by the Company, Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC (“ABCR”) and ABCR’s existing and future direct and indirect wholly owned domestic restricted subsidiaries that also guarantee ABCR’s senior secured credit facilities.
The Issuer may redeem all or part of the Notes at any time prior to February 28, 2026 at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole premium. The Issuer may redeem all or part of the Notes at any time on or after February 28, 2026 at the redemption prices set forth in the Indenture. At any time on or prior to February 28, 2026, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net cash proceeds that the Issuer or ABCR raises in one or more equity offering, at the redemption price specified in the Indenture.
Upon the occurrence of specific kinds of changes of control and a ratings downgrade, the Issuer must offer to repurchase the Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the repurchase date.
The Indenture limits, among other things, the ability of ABRC and its restricted subsidiaries (including the Issuer) 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 ABCR’s or the Issuer’s assets; and (vi) designate ABCR’s subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important limitations and exceptions. The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods).
The foregoing summary of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Indenture and the Notes, which are filed as Exhibits 4.1 and 4.2 hereto, respectively, and incorporated by reference into this Item 8.01.
