Avis Budget Car Rental Receives Increase in Credit Ratings

Wednesday, Moody’s Investors Service announced that it has raised its holds for Avis Budget Car Rental LLC by two. The car rental agency’s, which is a subsidiary of Avis Budget Group Inc, shares immediately rose following the move.

Moody’s has cited the reason for the move based on an expectation that the car hire firm is near to closing on an offering of $400 million worth of senior unsecured notes. Both announcements were made in the same day.

Avis has said that they will use the funding to pay back debts as well as fund general corporate needs. The raise will affect Avis’ senior secured credit which climbs from Ba3 to Ba2, as well as the company’s unsecured debt rating which will move from Caa1 to B3.

Moody’s also commented that the outlook for Avis’ standing as a company is looking positive. Hours after trading, the car hire firm’s shares rose 8 cents just after losing upwards of 11 cents and then finally closing at $10.65.

The car hire industry has seen a tough year during the harsh economic climate, and is just now beginning to see a rise in car hire bookings. Avis was one of many car hire giants facing financial woes at the close of the 2009 season.