DBRS cuts Avis Budget

DBRS said it downgraded the ratings of Avis Budget Group, Inc., and its related subsidiary Avis Budget Car Rental, LLC, including the company’s long-term issuer rating to BB (low) from BB.

Also, DBRS placed Avis Budget’s ratings under review with negative implications.

“The ratings actions reflect DBRS Morningstar’s view that the evolving coronavirus disease (Covid-19) outbreak will negatively impact the company’s credit fundamentals, especially revenues and its bottom line,” the agency said in a press release.

“The downgrade and under review with negative implications considers the significant coronavirus related headwinds facing Avis Budget. Global and local governments have enacted travel restrictions to reduce the spread of the coronavirus, resulting in a significant drop in aviation and automotive travel, pressuring vehicle rental volumes and utilization rates at the company’s on-airport and off-airport businesses,” said DBRS.

Reservations for Avis for April are down by about 60%, the agency said.

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