Avis Budget Got $650 Million In Cash From Pentwater, Plans To Repay $350 Million Of 2027 Notes
The car-rental company says it expects to use part of the settlement cash on its 5.750% notes before year end.
Avis Budget Group was paid $650 million in cash on Monday by hedge fund Pentwater Capital Management, according to an 8-K filed Tuesday. The payment ends the company's short-swing profit lawsuit against Pentwater.
What the 8-K says
The money came under a Settlement and Release Agreement with Pentwater Capital Management LP and certain affiliated persons. The company said the court approved the payment.
The settlement resolves Avis's lawsuit seeking recovery of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934. That provision requires insiders and large holders to hand back profits from quick buy-and-sell trades.
The agreement was previously reported. The filing says it was signed on June 19, 2026, so Monday's payment completes a deal already on the books.
The company will recognize the settlement in its fourth quarter financial statements.
What it changes: the 2027 notes
Avis said it expects to use a portion of the cash to repay the remaining $350 million of principal on its 5.750% Senior Notes due 2027 before year end.
The filing is explicit that this is not a redemption notice: "Nothing herein shall constitute a notice of redemption with respect to the 5.750% Senior Notes due 2027." The repayment plan is a stated expectation, not a commitment.
The company's forward-looking statement adds that the use of the cash may be affected by changes in market conditions, its liquidity needs or other factors.
The filing does not say how much of the $650 million would remain after the notes are repaid, or what the company would do with it.
What to watch
Two items follow from the filing. One is whether Avis repays the $350 million of 2027 notes before year end, as it expects. The other is how the settlement appears in fourth quarter results.
The stock was unchanged at $112.65 in Tuesday after-hours trading, versus the regular-session close (market data).
The company's fourth quarter statements are where the $650 million will first show up in its results.
Sources
- 8-K Filing — AVIS BUDGET GROUP, INC. (CAR) — SEC EDGAR
- Avis Budget Group, Inc. v. Halbower et al — law360.com
