What was the highest weighted average interest rate for debt issued by Budget in December 2024?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Repurchase Facility, which bears interest at a rate of 6.64%. As of December 31, 2024, we had $195 million of securities pledged as collateral for the Repurchase Facility, included within investment in Avis Budget Rental Car Funding (AESOP) LLC—related party on our Consolidated Balance Sheets.
International
Debt borrowings. In EMEA we operate a European rental fleet securitization program which is used to finance fleet purchases for certain of our European operations. In February 2024, we amended our European rental fleet securitization program to increase its capacity from €1.7 billion to €1.9 billion, to add £200 million to our capacity within the program, and to extend the maturity of the program from 2024 to 2026. The International borrowings primarily represent floating rate notes and had a weighted average interest rate of 6.07% and 5.51% as of December 31, 2024 and 2023, respectively.
Finance leases. We obtain a portion of our International vehicles under finance lease arrangements. For the years ended December 31, 2024 and 2023, the weighted average interest rate on these borrowings was 5.07% and 3.68% respectively. All finance leases are on a fixed repayment basis and interest rates are fixed at the contract date.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company had several types of debt with varying interest rates. For its international borrowings, which primarily represent floating rate notes, the weighted average interest rate was 6.07% as of December 31, 2024.
Additionally, Budget's repurchase agreement had an interest rate of 6.64% as of December 31, 2024, with $116 million outstanding under this facility. The senior revolving credit facility bears interest at one-month SOFR plus 2.00%. As of December 31, 2024, the loan bears interest at one-month Secured Overnight Financing Rate ("SOFR") plus 1.75%, for an aggregate rate of 6.22%.
Considering these figures, the highest weighted average interest rate for debt issued by Budget as of December 31, 2024, was 6.64% for the repurchase agreement. This is a significant factor for prospective franchisees to consider, as it reflects the cost of Budget's debt and could influence the company's financial stability and strategic decisions.