
12.	Long-term Corporate Debt and Borrowing Arrangements

Long-term debt and other borrowing arrangements consisted of:



	Maturity Date	As of December 31,
	Maturity Date	2017			2016
Floating Rate Senior Notes	December 2017	—			249
Floating Rate Term Loan	March 2019	—			144
6% euro-denominated Senior Notes	March 2021	—			194
Floating Rate Term Loan ^(a)	March 2022	1,136			816
5⅛% Senior Notes	June 2022	400			400
5½% Senior Notes	April 2023	675			675
6⅜% Senior Notes	April 2024	350			350
4⅛% euro-denominated Senior Notes	November 2024	360			316
5¼% Senior Notes	March 2025	375			375
4½% euro-denominated Senior Notes	May 2025	300			—
Other ^(b)		49			57
Deferred financing fees		(46		)	(53		)
Total		3,599			3,523
Less: Short-term debt and current portion of long-term debt		26			279
Long-term debt		$	3,573		$	3,244

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^(a)	The floating rate term loan is part of the Company’s senior revolving credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.


^(b)	Primarily includes capital leases which are secured by liens on the related assets.

Term Loan

Floating Rate Term Loan due 2019. The Company issued $500 million, $200 million, and $300 million of Floating Rate Term Loan due 2019 in March 2012, October 2012 and October 2013, respectively, under the Company’s senior credit facility. The term loan bears interest at the greater of three-month LIBOR or 0.75%, plus 225 basis points, for an aggregate rate of 3.25% at December 31, 2016. In March 2017, the Company repaid all of it outstanding Floating Rate Term Loan due 2019.

Floating Rate Term Loan due 2022. In May 2016, the Company extended the maturity date for $825 million of its $970 million existing corporate floating rate term loan borrowing by three years to March 2022. The extended portion then bore interest at LIBOR plus 2.50%, subject to a LIBOR floor of 0.75%, for an aggregate rate of 3.50%; however, the Company entered into an interest rate swap to hedge $600 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 4.21%.

In March 2017, the Company increased its Floating Rate Term Loan due 2022 to $1.1 billion and reduced the loan interest rate to three-month LIBOR plus 2.00%, for an aggregate rate of 3.70%; however, the Company entered into an interest rate swap to hedge $700 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 3.79%. The Company used the incremental term loan proceeds to repay all of its outstanding Floating Rate Term Loan due 2019. In June 2017, the Company used the remaining proceeds to redeem the remainder of its outstanding Floating Rate Senior Notes due 2017.

Senior Notes

Floating Rate Senior Notes due 2017. In November 2013, the Company issued its Floating Rate Senior Notes at 98.75% of their face value for aggregate proceeds of $247 million. The interest rate on these notes is equal to three-month LIBOR plus 275 basis points, for an aggregate rate of 3.68% at December 31, 2017; however, the Company has entered into an interest rate swap to hedge its interest rate exposure related to these notes at an aggregate rate of 3.58%. In June 2017, the Company repaid all of it outstanding Floating Rate Senior Notes due 2017.

6% euro-denominated Senior Notes due 2021. In March 2013, the Company issued €250 million (approximately $325 million, at issuance) of 6% euro-denominated Senior Notes due March 2021, at par, with interest payable semi-annually. The notes are unsecured obligations of the Company’s Avis Budget Finance plc subsidiary, are guaranteed on a senior basis by the Company and certain of its domestic subsidiaries and rank equally with all of the Company’s existing senior unsecured debt. 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 accrued interest.

In March 2014, the Company issued €200 million (approximately $275 million, at issuance) of additional 6% euro-denominated Senior Notes due 2021. These notes were sold at 106.75% of their face value for aggregate proceeds of approximately $295 million, with a yield to maturity of 4.85%. In April 2014, the Company used the proceeds to repurchase $292 million principal amount of its 8¼% Senior Notes.

In October 2016, the Company redeemed €275 million (approximately $302 million) of its principal amount for €287 million (approximately $315 million) plus accrued interest. In April 2017, the Company redeemed its outstanding €175 million (approximately $187 million) principal amount for €180 million (approximately $193 million ) plus accrued interest.

5⅛% Senior Notes due 2022. In May 2014, the Company issued $400 million of 5⅛% Senior Notes due 2022 at par. In June 2014, the Company used the proceeds to repurchase the remaining $395 million principal amount of its 8¼% Senior Notes. The notes were issued at par, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part at any time on or after June 1, 2017 at specified redemption prices plus accrued interest.

5½% Senior Notes due 2023. In April 2013, the Company completed an offering of $500 million of 5½% Senior Notes due April 2023. The notes were issued at par, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part on or after April 1, 2018 at specified redemption prices plus accrued interest.

In November 2014, the Company issued $175 million of additional 5½% Senior Notes due 2023 at 99.625% of their face value, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part on or after April 1, 2018 at specified redemption prices plus accrued interest. The Company used the proceeds from the issuance to partially fund the acquisition of its Budget licensee for Southern California and Las Vegas.

6⅜% Senior Notes due 2024. In March 2016, the Company issued $350 million of 6⅜% Senior Notes due 2024 at par, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part at any time on or after April 1, 2019 at specified redemption prices plus accrued interest. In May 2016, the Company used the net proceeds from the offering to redeem $300 million principal amount of its previous 4⅞% Senior Notes and for general corporate purposes.

4⅛% euro-denominated Senior Notes due 2024. In September 2016, the Company issued €300 million (approximately $337 million, at issuance) of 4⅛% euro-denominated Senior Notes due 2024 at par, with interest payable semi-annually. The notes are unsecured obligations of the Company’s Avis Budget Finance plc subsidiary, are guaranteed on a senior basis by the Company and certain of its domestic subsidiaries and rank equally with all of the Company’s existing senior unsecured debt. The Company has the right to redeem these notes in whole or in part at any time on or after November 15, 2019 at specified redemption prices plus accrued interest. In October 2016, the Company used the net proceeds from the offering primarily to redeem €275 million of its outstanding 6% euro-denominated Senior Notes due 2021.

5¼% Senior Notes due 2025. In March 2015, the Company issued $375 million of 5¼% Senior Notes due 2025 at par, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part at any time on or after March 15, 2020 at specified redemption prices plus accrued interest. In April 2015, the Company used net proceeds from the offering to redeem the remaining $223 million principal amount of its 9¾% Senior Notes and to partially fund the acquisition of Maggiore.

4½% euro-denominated Senior Notes due 2025. In March 2017, the Company issued €250 million of 4½% euro-denominated Senior Notes due 2025, at par, with interest payable semi-annually. The notes are unsecured obligations of the Company’s Avis Budget Finance plc subsidiary, are guaranteed on a senior basis by the Company and certain of its domestic subsidiaries and rank equally with all of the Company’s existing senior unsecured debt. The Company has the right to redeem these notes in whole or in part on or after May 15, 2020 at specified redemption prices plus accrued interest. In April 2017, the Company used the net proceeds from the offering to redeem its outstanding €175 million principal amount of 6% euro-denominated Senior Notes due 2021 for €180 million plus accrued interest. In June 2017, the Company used the remaining proceeds to redeem a portion of its Floating Rate Senior Notes due 2017.

The 5⅛% Senior Notes, the 5½% Senior Notes, 6⅜% Senior Notes and the 5¼% Senior Notes are senior unsecured obligations of the Company’s Avis Budget Car Rental, LLC (“ABCR”) subsidiary, are guaranteed by the Company and certain of its domestic subsidiaries and rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness.

In connection with the debt amendments and repayments for the years ended December 31, 2017, 2016 and 2015, the Company recorded $3 million, $27 million and $23 million in early extinguishment of debt costs, respectively.

Debt Maturities

The following table provides contractual maturities of the Company’s corporate debt at December 31, 2017:



Year	Amount
2018	$	26
2019	20
2020	16
2021	14
2022	1,493
Thereafter	2,076
	$	3,645

Committed Credit Facilities And Available Funding Arrangements

At December 31, 2017, the committed corporate credit facilities available to the Company and/or its subsidiaries were as follows:



	Total Capacity		Outstanding Borrowings		Letters of Credit Issued		Available Capacity
Senior revolving credit facility maturing 2021 ^(a)	$	1,800	$	—	$	782	$	1,018
Other facilities ^(b)	3		3		—		—

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^(a)	The senior revolving credit facility bears interest at one-month LIBOR plus 200 basis points and is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, 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 3.10% to 3.18% as of December 31, 2017.

At December 31, 2017 and 2016, the Company had various uncommitted credit facilities available, which bear interest at rates of 0.75% to 5.25%, under which it had drawn approximately $2 million and $5 million, respectively.

Debt Covenants

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 also contains a maximum leverage ratio requirement. As of December 31, 2017, the Company was in compliance with the financial covenants governing its indebtedness.