JPMorgan and Deutsche Bank have launched syndication of $2.375 billion of loans for Avis Rent A Car. Cendant Corp., which owns Avis, is using the credit to spin the rental car company off as it executes its plan to separate itself into four separate entities covering the real estate, travel distribution, hospitality and vehicle rental businesses. The deal launched March 16.
The credit is broken into a five-year, $1.5 billion revolver and a six-year, $875 million term loan. Pricing could not be determined. Standard & Poor's rated the loan BBB- and assigned a recovery rating of "1," which assures the highest probability of recovery in the event of a default. "The credit looks pretty solid; the rating affirms that," one investor said. "[Cendant] looks like they are handling the situation [splitting up the company] pretty well so far."
Based in Parsippany, N.J., Avis is a vehicle rental service with more than 1,700 locations in the U.S., Canada, Australia, New Zealand, and Latin America. Calls to JPMorgan were not returned and a banker at Deutsche Bank declined comment. Calls to Ronald Nelson, president and cfo at Cendant, were also not returned.