DOW JONES NEWSWIRES
Avis Budget Group (CAR) obtained commitments for roughly $325
million in operating-lease financing to add vehicles to its U.S.
rental fleet over the next four months, relieving some pressure
from constrained credit that has added to the sector's woes amid
low demand.
The financing provides "additional liquidity at competitive
rates" as the company anticipates a rebound in demand for next
year, said Chief Financial Officer David B. Wyshner.
The car-rental industry has been among the hardest hit in the
transportation sector by a decline in travel spending and falling
demand for used vehicles. Avis and rivals have been cutting costs,
including through layoffs, in response to slumping revenue and
higher vehicle depreciation and maintenance costs.
However, earlier this month the company echoed competitors in
its view that volume appeared to stabilize in March.
Standard & Poor's Ratings Service in April expressed
concerns about the company's ability to refinance most of its $4
billion in debt that matures through next year and expectations
that credit markets would continue to require higher
collateralization for secured vehicle facilities.
Shares closed at $3.81 on Friday and didn't trade premarket.
Markets were closed Monday for the Memorial Day holiday. The stock
has lost nearly three quarters of its value in the past year,
though it has soared from an all-time low of 34 cents in March.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com