Avis Budget Group plans $500 million senior notes offering

PARSIPPANY, N.J. - Avis Budget Group, Inc. (NASDAQ: CAR), a $3.74 billion market cap company with existing debt of $26.4 billion, announced today its intention to offer $500 million in senior notes due 2032 through its subsidiaries, Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. The offering is subject to market conditions and other factors. According to InvestingPro analysis, the company maintains a FAIR financial health score of 2.1, suggesting stable operational fundamentals despite its significant debt load.

The senior notes will be guaranteed by Avis Budget Group and certain U.S. subsidiaries. The company, which generated $11.67 billion in revenue over the last twelve months, aims to allocate the net proceeds for general corporate purposes. These may include repaying part of its floating rate term loan A due in December 2025 and reducing outstanding fleet debt, along with covering associated fees and expenses.

The notes and guarantees are offered only to qualified institutional buyers under Rule 144A, or to non-U.S. persons in compliance with Regulation S, outside the United States. They have not been registered under U.S. securities laws and will not be offered or sold in the U.S. without registration or an applicable exemption from registration requirements.

This move by the global mobility solutions provider, which operates the Avis, Budget, and Zipcar brands across approximately 10,250 rental locations worldwide, is part of its financial strategy. The company’s stock has shown strong momentum with a 31.93% year-to-date return, trading at $106.35. For deeper insights into CAR’s valuation and growth potential, including exclusive ProTips and comprehensive financial analysis, visit InvestingPro. The press release emphasizes that the offering details will be available exclusively through a private offering memorandum.

The company’s statement includes forward-looking remarks regarding the offering and its intended use of proceeds, cautioning that actual outcomes may vary due to market risks and other uncertainties. With an EBITDA of $901 million in the last twelve months, investors seeking detailed analysis of CAR’s debt management strategy and future prospects can access the comprehensive Pro Research Report available on InvestingPro.

It is important to note that this news is based on a press release statement from Avis Budget Group, Inc., and no offers of the notes have been made as of this announcement. The company’s official filings with the SEC provide further information on associated risks and uncertainties.

In other recent news, Avis Budget Group reported disappointing financial results for Q1 2025, with earnings per share significantly below expectations at -$14.35 and revenue declining to $2.4 billion from $2.5 billion in Q1 2024. Despite these setbacks, the company managed to achieve an adjusted EBITDA loss of $93 million, which was better than some analyst estimates. Avis Budget’s strategic fleet rotation contributed to cost savings, with vehicle depreciation per unit tracking below projections, as noted by analysts from JPMorgan and Jefferies.

Goldman Sachs recently adjusted its outlook on Avis Budget, lowering the stock price target to $87 due to mixed results in the company’s earnings report and projecting a 3.8% year-over-year decrease in revenue per day for Q2. In contrast, JPMorgan raised its price target to $155, citing better-than-expected EBITDA performance and favorable vehicle depreciation trends. Jefferies also increased its price target to $117, acknowledging the company’s effective fleet management and operational improvements.

These developments come amidst Avis Budget’s ongoing efforts to manage fleet costs and maintain financial stability, with the company reiterating its goal to achieve an annual adjusted EBITDA of at least $1 billion. Despite macroeconomic uncertainties, Avis Budget’s management remains focused on leveraging favorable market conditions, including potential benefits from tariff-induced inflation in new vehicle prices.

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