Hertz Global Holdings amended certain provisions of its senior facilities and has entered into a new $400 million standalone letter of credit facility.

These transactions are liquidity neutral as of the date of their execution and the principal benefits include:

  • Extending its vehicle debt maturities of approximately $5.3 billion in aggregate principal amount of Hertz’s and its subsidiaries’ global bank-funded vehicle financing facilities through March 2020.
  • Extending Hertz’s corporate debt maturity runway by providing for the unconditional redemption in full of $450 million outstanding principal amount of Hertz’s 6.75% senior notes due April 2019.
  • Improving the cushion Hertz has under its consolidated first-lien leverage ratio by reducing outstanding first-lien debt by terminating $383 million of available commitments under the senior secured revolving credit facility. Pro forma for this transaction, Hertz’s consolidated first-lien leverage ratio as of June 30, 2017 would have declined from 2.56x to 1.53x
  • Creating immediate debt incurrence capacity of $542 million under the $2.4 billion credit facilities basket contained in Hertz’s senior facilities as long as such debt incurred is, among other things, junior to the company’s first-lien debt. If Hertz elects to utilize such capacity, the proceeds from such newly incurred debt would not be required to be used to refinance debt and may be used for working capital, capital expenditures and other purposes of the Company and its subsidiaries.
  • Creating the potential to increase such debt incurrence capacity by an additional $400 million if Hertz elects to utilize a newly executed standalone $400 million letter of credit facility.

Thomas Kennedy, Hertz’s CFO, said, “We are pleased with the outcome of our previously discussed plan to extend our fleet maturities, and add incremental debt capacity and covenant cushion. This combination of transactions provides us with flexibility and ensures we have the capacity to optimally execute on our multi-year improvement plan. We appreciate the continued support of our bank group as we work to reposition Hertz for long-term profitable growth.”

Hertz reported that as of November 2, 2017, it had fully repaid all loans outstanding under its senior revolving credit facility.

According to a related 8-K filing, Barclays Bank served as administrative agent and collateral agent for the credit facility. Credit Agricole Corporate and Investment Bank was syndication agent. Bank of Montreal, BNP Paribas, Citibank, Goldman Sachs Bank USA and Royal Bank of Canada were as co-documentation agents.