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 Notes.
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).
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
