Hertz Global, a global rental car company, through its wholly-owned indirect subsidiary, The Hertz Corporation, intends to offer, subject to market and other conditions, $500 million in aggregate principal amount of first lien senior secured notes due 2029 and $250 million in aggregate principal amount of exchangeable senior second-lien secured PIK notes due 2029, in private offerings exempt from the registration requirements of the Securities Act of 1933, as amended._x000D_
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Concurrently with the offerings of the notes, investors affiliated with CK Amarillo have committed to Hertz Corporation and an investor has provided a firm commitment to an initial purchaser to purchase up to $250 million aggregate principal amount of exchangeable notes. In addition, Hertz Corporation has received a backstop commitment to purchase up to $500 million aggregate principal amount of first lien notes._x000D_
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Hertz Corporation intends to use the net proceeds of the offerings to pay down a portion of its $2 billion committed revolving credit facility, improving liquidity. The completion of the offering of the first lien notes and the completion of the offering of the exchangeable notes are not contingent on each other._x000D_
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The exchangeable notes will bear PIK interest payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. Hertz Corporation expects that the initial exchange price for the exchangeable notes will be at a 100% premium to the volume-weighted average price of the common stock of the company on the date of pricing of the exchangeable notes, but in no event greater than $7.00 or less than $6.00 per share of common stock._x000D_
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The interest rate and certain other terms of the exchangeable notes will be determined by negotiations between Hertz Corporation and the initial purchasers. The exchangeable notes will mature on June 15, 2029, unless repurchased, redeemed or exchanged in accordance with their terms prior to maturity. Prior to March 15, 2029, the exchangeable notes will be exchangeable only upon satisfaction of certain conditions and during certain periods, and thereafter, the exchangeable notes will be exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The exchangeable notes will be exchangeable on the terms set forth in the indenture into cash, shares of common stock, or a combination thereof, at Hertz Corporation’s election._x000D_
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Holders of the exchangeable notes will have the right to require Hertz Corporation to repurchase all or a portion of its exchangeable notes at 100% of their initial principal amount of the exchangeable notes to be repurchased plus PIK interest on such exchangeable notes for each interest payment date occurring on or prior to the repurchase date plus accrued and unpaid PIK interest to, but excluding, the date of such repurchase, upon the occurrence of certain corporate events constituting a “fundamental change” as defined in the indenture governing the exchangeable notes. Hertz Corporation may not redeem the exchangeable notes prior to June 21, 2027. On or after June 21, 2027 and on or prior to the 31st scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of common stock has been at least 250% of the exchange price for the exchangeable notes for certain specified periods, Hertz Corporation may redeem all (but not part) of the exchangeable notes at a cash redemption price equal to the initial principal amount of the exchangeable notes to be redeemed plus PIK interest on such exchangeable notes for each interest payment date occurring on or prior to the redemption date plus accrued and unpaid PIK interest on such exchangeable notes to, but not including, the redemption date._x000D_
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The notes are expected to be guaranteed by the company, Rental Car Intermediate, Hertz Corporation’s direct parent company, and each of Hertz Corporation’s existing domestic subsidiaries and future restricted subsidiaries that guarantees indebtedness under Hertz Corporation’s first lien credit facilities or certain other indebtedness for borrowed money. The first lien notes and the related guarantees (other than the guarantee by the company) are expected to be secured (subject to certain exceptions and permitted liens) on a first-lien basis by the same assets (other than certain excluded property) that secure indebtedness under Hertz Corporation’s first lien credit facilities and are therefore expected to be effectively pari passu with indebtedness under Hertz Corporation’s first lien credit facilities. The exchangeable notes and the related guarantees (other than the guarantee by the company) are expected to be secured (subject to certain exceptions and permitted liens) on a second-lien basis by the collateral and are therefore expected to be effectively junior to the first lien notes and indebtedness under Hertz Corporation’s first lien credit facilities._x000D_
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The notes and the guarantees of the notes are being offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and, except for the exchangeable notes and the related guarantees, to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The notes, the guarantees of the notes and any shares of common stock issuable upon exchange of the exchangeable notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and the securities laws of any other jurisdiction.
Forward for Specialty Finance
