Avis Budget Group Acquires Commitments to Renew Asset-Backed Conduit Financing
Avis Budget Group also launches an amendment to senior credit facilities.
Avis Budget Group Inc. announced Dec. 23 that it has received commitments to renew its $1.45 billion principal asset-backed bank conduit facility and its $1 billion seasonal conduit facility, which are used to finance cars for its rental fleet. The commitments provide for a reallocation of $100 million from the principal conduit facility to the seasonal conduit facility.
The principal conduit facility will be extended through Dec. 22, 2009, and the seasonal conduit facility will have a final maturity in November 2009 following 25 percent reductions in borrowing capacity in each of September and October. The initial borrowing spreads for these annually renewing facilities are unchanged from the levels established in connection with the extension of the principal conduit facility in October. The commitments are subject to customary conditions, principally satisfactory documentation, and the company expects that the renewal of the conduit facilities will become effective before the end of the year.
The company also announced that it has launched an amendment to its senior credit facilities to replace the leverage and interest coverage ratios with a minimum EBITDA covenant. The amendment also provides for a reduction to the revolving credit facility from $1.5 billion to $1.15 billion and a 2.5 percent increase in the cost of borrowings and letters of credit. Based on feedback from several of the lenders under such facilities, the company expects the amendment to become effective before the end of the year.
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