Item 8.01 Other Events.
On May 21, 2024, Avis Budget Finance plc (the “Issuer”), a wholly-owned subsidiary of Avis Budget Group, Inc. (the “Company”), issued €200 million aggregate principal amount of 7.25% Senior Notes due 2030 (the “New Notes”). The New Notes were issued as additional notes pursuant to the Indenture, dated as of July 13, 2023 (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated as of May 21, 2024 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), each by and among the Issuer, the Company, the other guarantors party thereto, Deutsche Bank Trust Company Americas, as trustee and as registrar, and Deutsche Bank AG, London Branch, as paying agent. The Issuer previously issued €400 million aggregate principal amount of 7.25% Senior Notes due 2030 (the “Existing Notes” and, together with the New Notes, the “Notes”) under the Base Indenture. The New Notes will form part of the same series as the Existing Notes.
The Issuer intends to use the net proceeds from the offering for general corporate purposes, which may include repayment of indebtedness, including, without limitation, outstanding fleet debt, and to pay fees and expenses in connection with the foregoing.
The Notes will mature on July 31, 2030 and bear interest at a rate of 7.25% per annum, payable semi-annually in cash in arrears on January 31 and July 31 of each year. Interest on the New Notes will be deemed to accrue from January 31, 2024 and the first interest payment will be on July 31, 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 July 31, 2026 at a 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 July 31, 2026 at the redemption prices set forth in the Indenture. At any time on or prior to July 31, 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 specified kinds of changes of control, 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 Base Indenture and the Notes, which are filed as Exhibits 4.1 and 4.2 to the Current Report on Form 8-K filed on July 14, 2023, and the Supplemental Indenture, which is filed as Exhibit 4.1 hereto, each of which is incorporated by reference into this Item 8.01.
