Avis Budget Group, Inc.: $650 Million Windfall

Research evidence excerpt

Avis Budget Group, Inc.: $650 Million Windfall

Deutsche Bank

Research

Global Company Date

North America 23 June 2026

Avis Budget Group,

High Yield Corporates

Industrials & Manufacturing Inc.

$650 Million Windfall

Sean-M Wondrack

Avis reaches proposed $650m cash settlement with Pentwater Research Analyst

In an 8K on 6/22/2026 Avis disclosed that it had reached a potential $650 million +1-212-250-8980

cash settlement with Pentwater Capital related to Section 16(b) short-swing profits

during the extraordinary stock volatility in April 2026, subject to court approval.

While many were penciling in some prospective positive recovery, we do not

believe the market was prepared for such a large cash inflow, and we expect the

stock and bonds to react favorably. Should the court approve the transaction and

Avis receive the funds, this would represent a meaningful source of discretionary

cash that would immediately bolster liquidity, which Avis could then apply to

reduce debt or support fleet demand. This would also reduce refinancing risk

around near-term corporate and fleet maturities.

Use of proceeds?

If we were to simply add the $650 million to cash & equivalents, net leverage would

fall to ~6.7x from 7.6x today. The key question becomes: how will Avis allocate the

proceeds? Investors are likely to assume the cash strengthens liquidity and

supports debt reduction, but it is possible the funds could be applied toward more

shareholder-friendly actions or even M&A or strategic investments (e.g.,

autonomous vehicles). It also remains unclear as to when the funds will arrive

should the court approve, which seems more likely than not considering both

parties have reportedly agreed.

Please see the link to our most recent research note and model from 5/15/2026: Avis