Daily News: November 27, 2013

Barclays/J.P. Morgan Are Bookrunners for Hertz Fleet Lease


Hertz Global Holdings announced that Barclays Capital and J.P. Morgan Securities acted as joint lead bookrunners for a transaction in which Hertz Fleet Lease Funding issued $500 million in aggregate principal amount of Series 2013-3 floating rate asset-backed notes, class A, class B, class C and class D. Barclays Capital acted as sole structuring advisor, and Fifth Third Securities and PNC Capital Markets acted as co-managers.

Donlen, a wholly owned company subsidiary, utilizes the Hertz Fleet Lease Funding (HFLF) securitization platform to finance its U.S. fleet leasing operations.

The HFLF Series 2013-3 notes are floating rate and carry an interest rate based upon a spread to one-month LIBOR. The $461.1 million of class A notes carry a spread of 0.55%, the $13.4 million of class B notes carry a spread of 1.05%, the $12.9 million of class C notes carry a spread of 1.45%, and the $12.6 million of class D notes carry a spread of 2.00%.

The notes contain provisions that allow them to revolve until December 2014. During the revolving period, the monthly lease collections allocable to the notes are permitted to be used, subject to customary conditions, to fund the acquisition of vehicles and/or equipment to be leased to customers. Upon expiration of the revolving period, the repayment of principal of the HFLF Series 2013-3 notes will commence, with monthly payments made from the HFLF Series 2013-3 Notes’ allocable share of lease payments and proceeds from the sale of vehicles and equipment leased thereunder until the HFLF Series 2013-3 notes are paid in full.

The assumed weighted average life to maturity of the class A notes, the class B notes, the class C notes, and the class D notes are expected to be 1.93 years, 2.82 years, 2.88 years, and 2.92 years, respectively. The class B notes are subordinated to the class A Notes. The class C notes are subordinated to the class A notes and the class B notes. The class D notes are subordinated to the class A notes, the class B notes, and the class C notes.

The net proceeds from the sale of the notes were used to repay a portion of the outstanding principal amount of HFLF’s Series 2013-1 notes and) to make loans to DNRS II LLC, a wholly owned special purpose subsidiary of Donlen. The offering closed on November 25, 2013.