Avis Budget Group Ratings Lowered To 'B+' On Steep Demand Decline Amid Coronavirus Outbreak; On CreditWatch Negative

Airline travel, from which Parsippany, N.J.-based car renter Avis Budget Group Inc. generates most of its revenues, has declined steeply due to the coronavirus outbreak. We now expect Avis Budget's revenues and cash flow will be sharply lower, resulting in much weaker credit metrics in 2020 than 2019 and our previous expectations. Although we expect Avis Budget to reduce its fleet by cancelling new vehicle orders, we expect it to encounter difficulties disposing of its fleet in a weak used car market. We currently expect airline travel to begin to recover in third-quarter 2020, but any delay will prolong weakness in credit metrics. We are revising our liquidity assessment to less than adequate from adequate based on the company's expected

...April 21, 2020 - Airline travel, from which Parsippany, N.J.-based car renter Avis Budget Group Inc. generates most of its revenues, has declined steeply due to the coronavirus outbreak. We now expect Avis Budget's revenues and cash flow will be sharply lower, resulting in much weaker credit metrics in 2020 than 2019 and our previous expectations. - Although we expect Avis Budget to reduce its fleet by cancelling new vehicle orders, we expect it to encounter difficulties disposing of its fleet in a weak used car market. - We currently expect airline travel to begin to recover in third-quarter 2020, but any delay will prolong weakness in credit metrics. - We are revising our liquidity assessment to less than adequate from adequate based on the company's expected sharply reduced cash flow generation to meet its financial obligations. - We are lowering all ratings, including the issuer credit rating, to 'B+' from '##'. All ratings remain on CreditWatch, where we placed them with negative implications...

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