What interest rate did Budget pay on the Senior Notes due 2028?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
otes due July 2027, at 92% of face value, under the indenture governing our existing 5.750% Senior Notes. We used the proceeds from this offering to redeem the outstanding $100 million in aggregate principal amount of our 5.500% Senior Notes due 2023, with the remainder being used for general corporate purposes.
- 4.750% Senior Notes due 2028. In March 2021, we issued $500 million of 4.750% Senior Notes due April 2028, at par, with interest paid semi-annually. We have the right to redeem these notes in whole or in part at any time on or after April 1,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company issued $500 million of 4.750% Senior Notes due April 2028 in March 2021. These notes were issued at par, with interest paid semi-annually.
Budget has the right to redeem these notes in whole or in part at any time on or after April 1, 2024, at specified redemption prices plus accrued interest. The net proceeds from issuing these notes, combined with cash on hand, were used to redeem all of the outstanding 6.375% Senior Notes due 2024 for $356 million plus accrued interest and a portion of the outstanding 5.250% Senior Notes due 2025 for $142 million plus accrued interest.
This means that Budget financed the redemption of earlier debts with the issuance of these Senior Notes due in 2028. For a prospective franchisee, this indicates Budget's ongoing management of its debt obligations and its ability to access capital markets. The ability to redeem the notes early provides Budget with financial flexibility, but it also reflects the cost of borrowing at the stated interest rate.