Avis Budget Rent-a-car Prices Note Offering

PARSIPPANY, N.J. (AP) — Rental-car company Avis Budget Group Inc. said on Wednesday that it priced a private offering of $300 million of 3.5 percent convertible senior notes due 2014.

The offering is expected to close on Tuesday. Avis Budget also granted the initial buyers of the notes the right to buy up to an additional $45 million of notes to cover overallotments.

The initial conversion rate for the notes is 61.5 shares of common shares per $1,000 of the notes, which is equal to an initial conversion price of about $16.25 per share. That represents a 30 percent conversion premium above the company's Wednesday's closing price of $12.50 per share. The notes mature Oct. 1, 2014.

Avis Budget also plans to enter into a warrant transaction and to buy a convertible note hedge. The company plans to use about 10 percent of the net proceeds from the offering to pay the cost of the convertible note hedge and to use the rest for general corporate purposes, including the repayment of debt.

Earlier this week, Avis said it planned to offer $250 million in convertible senior notes due in 2014 and would grant purchasers the right to buy an additional $37.5 million worth of notes.