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Avis Equities Sell-Off After Earnings Call

CONSUMER CYCLICALS

Equities were down -2.5% in post-market trading but has collapsed this morning down -18% (earnings call was earlier today). $ lines are up to a $1 cheaper (+20-30bps on yield), € lines streaming 30-50c cheaper. Some insights from call;

On BS: capital allocation strategy is not changing, $800m liquidity with additional borrowing of $900m in ABS facilities (little changed/ $1b late last yr), net corporate leverage of 1.7.

On Guidance; forgoing formal guidance but expect mid-single-digit growth in rental demand (yoy) & depreciation of $325/car in 1Q (c$302). Will de fleet through 1st & 2nd qtr to bring up utilisation.

As we mentioned despite curve trading wide to rating - still a highly cyclical name with summer/peak period likely to be weaker this year (after record one this yr), weaker Util. rates already seen last qtr & guidance for step up in depreciation all paint weaker fundamentals for the name heading forward.

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