© Reuters
Investing.com – Avis Budget (NASDAQ:) Group is suffering from an increase in costs, which has prompted Gimme Credit to downgrade its credit stance on the car rental giant this year.
Gimme Credit, a leading provider of independent corporate bond research, cut its credit stance to ‘deteriorating’ from ‘improving, while reducing its credit score to -1 from +1, according to a note dated Feb. 21.
“Avis Budget Group is experiencing a return to more normal seasonal demand post-the COVID-related travel binge. However, a significant increase in fleet costs (including vehicle interest expense) is weighing on adjusted EBITDA with this trend likely to last at least through the end of 2024,” the group said, in a note.
Avis is de-fleeting to keep the size of the fleet just under demand, the analysts said, to help mitigate the situation.
“Although rental demand…
