Debt Under Vehicle Programs and Borrowing Arrangements

9 Months Ended

Sep. 30, 2013

Debt Under Vehicle Programs and Borrowing Arrangements

Debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding) consisted of:



	As of		As of
	September 30,		December 31,
	2013		2012
North America - Debt due to Avis Budget Rental Car Funding ^(a)	$	6,128	$	5,203
North America - Canadian borrowings ^(a)	582		353
International - Debt borrowings ^(a)	1,161		679
International - Capital leases ^(a)	437		315
Truck Rental - Debt borrowings	241		253
Other^(b)	87		3
Total	$	8,636	$	6,806

__________


^(a)	The increase principally reflects increased borrowing to fund a seasonal increase in the size of the Company’s car rental fleet.


^(b)	The increase is principally related to the vehicle-backed debt of Zipcar and Payless.

The following table provides the contractual maturities of the Company’s debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding) at September 30, 2013:



	Vehicle- Backed Debt
Within 1 year ^(a)	$	1,280
Between 1 and 2 years	2,209
Between 2 and 3 years	1,694
Between 3 and 4 years	1,182
Between 4 and 5 years	1,614
Thereafter	657
Total	$	8,636

__________


^(a)	Vehicle-backed debt maturing within one year includes term asset-backed securities of approximately $610 million and bank and bank-sponsored borrowings of $670 million.

As of September 30, 2013, available funding under the Company’s vehicle programs (including related party debt due to Avis Budget Rental Car Funding) consisted of:



	Total Capacity ^(a)		Outstanding Borrowings		Available Capacity
North America - Debt due to Avis Budget Rental Car Funding ^(b)	$	7,968	$	6,128	$	1,840
North America - Canadian borrowings ^(c)	742		582		160
International - Debt borrowings ^(d)	1,381		1,161		220
International - Capital leases	466		437		29
Truck Rental - Debt borrowings ^(e)	246		241		5
Other ^(f)	100		87		13
Total	$	10,903	$	8,636	$	2,267

__________


^(a)	Capacity is subject to maintaining sufficient assets to collateralize debt.


^(b)	The outstanding debt is collateralized by approximately $7.8 billion of underlying vehicles and related assets.


^(c)	The outstanding debt is collateralized by $889 million of underlying vehicles and related assets.


^(d)	The outstanding debt is collateralized by approximately $1.6 billion of underlying vehicles and related assets.


^(e)	The outstanding debt is collateralized by $440 million of underlying vehicles and related assets.


^(f)	The outstanding debt is collateralized by $165 million of underlying vehicles and related assets.

In March 2013, the Company entered into a three-year, €500 million (approximately $675 million) European rental fleet securitization program, which matures in 2016 and will be used to finance fleet purchases for certain of the Company’s European operations.

Debt agreements under the Company’s vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries and restrictions on indebtedness, mergers, liens, liquidations and sale and leaseback transactions and in some cases also require compliance with certain financial requirements. As of September 30, 2013, the Company is not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under its vehicle-backed funding programs.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details