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I am surprised the Avis has to goto the junk bond market - the cruise line I can sort of get
by C1sc0cat 6y ago
I am surprised the Avis has to goto the junk bond market - the cruise line I can sort of get
- pm90 6y agoThe rental car market is strongly tied to the travel (both business and leisure) which has crashed. Why would it be surprising if a rental car company is in financial trouble?
- lmm 6y agoI'd assume most of their business is renting to people who've just flown somewhere, and right now hardly anyone is doing that.
- C1sc0cat 6y agoAh true - though I wonder if their balance sheet wasn't that good to start with.
- MR4D 6y agoHertz is on the verge of bankruptcy so it only follows that the risk premium for Avis is high. Just think - if nobody is flying, who is renting all those cars?
- TheAdamist 6y agoNo one, they dont even have enough parking for them to all be idle simultaneously. The airport rental agencies near me have been renting out all the stadium parking nearby to use as overflow storage.
- koolba 6y agoOn the capital side, one of the biggest assets for rental companies are their fleets. The sell them as used cars. With nobody buying cars at all and the glut of unsold new cars packing lots, those fleets are being revalued at much lower prices. It’s a double whammy.
- mrep 6y agoYeah, I saw on reddit last month a possible insurance scam in which 3500 rental cars caught fire in an overflow parking lot in florida because they are all sitting around unused [0]. [0]: https://www.cnn.com/2020/04/05/us/airport-fires-cars-trnd/index.html https://www.cnn.com/2020/04/05/us/airport-fires-cars-trnd/in...
- johnrgrace 6y agoIt wasn't an insurance scam because they don't have insurance, they are going to eat the cost of all of those vehicles.