Long-term Debt and Borrowing Arrangements

Long-term and other borrowing arrangements consisted of:



		As of		As of
	Maturity Dates	March 31, 2013		December 31, 2012
Floating rate notes ^(b)	May 2014	$	250	$	250
3½% convertible notes ^(c)	October 2014	77		128
Floating rate term loan ^{(a) (d)}	May 2016	48		49
4⅞% notes	November 2017	300		300
9⅝% notes	March 2018	446		446
8¼% notes	January 2019	730		730
Floating rate term loan ^{(a) (e)}	March 2019	894		689
9¾% notes	March 2020	250		250
6% Euro-denominated notes	March 2021	320		—
		3,315		2,842
Other		32		63
Total		3,347		2,905
Less: Short-term debt and current portion of long-term debt		29		57
Long-term debt		$	3,318	$	2,848

__________

^(a)

The floating rate term loans are part of the Company’s senior credit facility, which also includes its revolving credit facility maturing 2016, and are secured by pledges of all of the capital stock of all of the Company’s direct or indirect domestic subsidiaries and 65% of the capital stock of each direct foreign subsidiary, subject to certain exceptions, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.


^(b)	As of March 31, 2013, the floating rate notes due 2014 bear interest at three-month LIBOR, plus 250 basis points, for an aggregate rate of 2.79%.


^(c)	As of March 31, 2013, the 3½% convertible notes are convertible by the holders into approximately 5 million shares of our common stock.


^(d)	As of March 31, 2013, the floating rate term loan due 2016 bears interest at three-month LIBOR, plus 300 basis points, for an aggregate rate of 3.31%.


^(e)	As of March 31, 2013, the floating term rate loan due 2019 bears interest at the greater of three-month LIBOR or 1.0%, plus 275 basis points, for an aggregate rate of 3.75%.

During March 2013, the Company issued €250 million of 6% senior notes due 2021, at face value. The notes pay interest semi-annually on March 1 and September 1 of each year, beginning in September 2013. The notes are unsecured obligations of the Company’s Avis Budget Finance plc subsidiary and are guaranteed on a senior basis by the Company and certain of its domestic subsidiaries. The notes rank equally with all of the Company’s existing and future senior unsecured debt and will be senior to all of the Company’s existing and future subordinated indebtedness. The Company has the right to redeem these notes in whole or in part on or after April 1, 2016 at specified redemption prices, plus any accrued and unpaid interest. The Company used the proceeds from the issuance to partially fund the acquisition of Zipcar.

During March 2013, the Company amended its Amended and Restated Credit Agreement, dated as of May 3, 2011 (the “Credit Agreement”) to issue an additional $200 million of term loan due 2019, which loan will bear interest at the greater of three-month LIBOR or 1.00%, plus 275 basis points (the “New Term Loan”). The Company used the proceeds from the New Term Loan to partially fund the acquisition of Zipcar. Pursuant to this Credit Agreement amendment, the Company also replaced $700 million of its existing term loan with a term loan bearing the same interest rate and maturity as the New Term Loan.

During the three months ended March 2013, the Company repurchased approximately $51 million of its 3½% convertible notes for approximately $89 million, plus accrued interest.

During March 2013, the Company commenced a cash tender offer to purchase any and all of the outstanding $450 million of the 9⅝% notes due 2018 and a portion of its outstanding 9¾% notes due 2020. The tender offer expired April 16, 2013, and the settlement of the tender offer will be funded with the proceeds of the issuance of $500 million of the Company’s 5½% Senior Notes, which were issued April 3, 2013. (See Note 18—Subsequent Events).

Committed Credit Facilities and Available Funding Arrangements

At March 31, 2013, the committed credit facilities available to the Company and/or its subsidiaries included:



	Total Capacity		Outstanding Borrowings		Letters of Credit Issued		Available Capacity
Revolving credit facility maturing 2016 ^(a)	$	1,500	$	—	$	750	$	750
Other facilities ^(b)	9		3		—		6

__________

^(a)

This revolving credit facility matures in 2016 and bears interest of one-month LIBOR, plus 300 basis points. The Company’s senior credit facility, which encompasses the floating rate term loans due 2016 and 2019 and the revolving credit facility, is secured by pledges of all of the capital stock of all of the Company’s domestic subsidiaries and 65% of the capital stock of each foreign subsidiary directly owned by the Company’s domestic subsidiaries, subject to certain exceptions, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.


^(b)	These facilities encompass bank overdraft lines of credit, bearing interest of 4.50% to 5.80% as of March 31, 2013.

At March 31, 2013, the Company had various uncommitted credit facilities available, under which it had drawn approximately $8 million, which bear interest at rates between 0.42% and 8.22%.

The agreements governing the Company’s indebtedness contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries, the incurrence of additional indebtedness by the Company and certain of its subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. The Company’s senior credit facility contains maximum leverage and minimum interest coverage ratio requirements. As of March 31, 2013, the Company was in compliance with the financial covenants of its senior credit facility.