Hertz Announces New $500 Million Senior Secured Notes Offering to Enhance Financial Flexibility

Hertz Announces New Senior Secured Notes Offering

Hertz Global Holdings, Inc., widely recognized as a leader in the global rental car industry, has announced the launch of a $500 million issuance of additional first lien senior secured notes. This move underscores Hertz's strategy to strengthen its financial position while also managing existing obligations effectively.

The announcement, made on December 5, 2024, details that Hertz's wholly owned indirect subsidiary, The Hertz Corporation, has priced these notes as part of a private offering that is exempt from the registration under the Securities Act of 1933. This new offering will extend Hertz's existing $12.625% first lien senior secured notes, initially issued on June 28, 2024, with new notes also due in 2029. Following the completion of this offering, Hertz will have a total of $1.25 billion in these notes outstanding.

The funds raised from this issuance are intended to be utilized for several strategic purposes. Primarily, Hertz plans to repay outstanding borrowings under its revolving credit facility, which will help to reduce its debt load. Additionally, the proceeds will cover consent fees associated with current solicitations aimed at amending the terms of related indentures, including those governing the company’s 8.000% exchangeable senior second-lien PIK notes due in 2029, as well as for general corporate purposes.

These notes will be issued at 107.732% of their principal amount, plus any interest accrued from the previous issuance date. They will feature a competitive interest rate of 12.625%, with payments being made semi-annually on January 15 and July 15, starting in January 2025. The maturity of these notes is set for July 15, 2029.

Furthermore, the notes will be backed by guarantees from various Hertz subsidiaries. They will also be secured on a first lien basis against the same assets used to secure existing credit facilities, thereby providing lenders with robust collateral and aligning the new issuance with Hertz's current secured indebtedness.

Investor access to these financial instruments will be limited to qualified institutional buyers under Rule 144A, as well as non-U.S. persons according to Regulation S under the Securities Act. This approach is designed to create an exclusive offering environment that ensures compliance with U.S. securities laws while meeting investor needs.

Hertz continues to be a prominent name in the vehicle rental sector, operating multiple well-known brands including Hertz, Dollar, and Thrifty across various international markets. The strategic move to enhance liquidity through these notes not only reflects Hertz’s strong market position but also demonstrates its proactive approach towards financial management.

In light of recent market conditions and evolving challenges in the travel industry, this offering represents more than just a financial maneuver; it is part of Hertz's broader strategy to navigate and capitalize on new opportunities while ensuring stability in a competitive landscape. Company officials remain vigilant about risks related to market fluctuations and economic shifts, emphasizing the importance of flexible financial strategies to adapt to an ever-changing environment.

For stakeholders, this announcement may signal continued confidence in Hertz's recovery and growth prospects post-pandemic, particularly in the context of evolving customer preferences and mobility needs in a post-COVID-19 world. As Hertz continues on this path, it remains a company to watch in the rental car sector, with promising developments expected in the near future.