SOURCE: The Hertz Corporation

The Hertz Corporation

December 20, 2010 09:14 ET

Hertz Global Holdings Announces Successful Completion of 2010 Refinancing Process

PARK RIDGE, NJ--(Marketwire - December 20, 2010) - Hertz Global Holdings, Inc. (NYSE: HTZ) --

  • Refinanced our 2009-1 Variable Funding Notes
  • Completed a $200 million issuance of 2010-2 Variable Funding Notes
  • These transactions are expected to reduce our fleet interest expense by over $20 million in 2011

Hertz Global Holdings, Inc. (NYSE: HTZ) ("Hertz Holdings") announced today that, on December 16, 2010, its subsidiary Hertz Vehicle Financing LLC ("HVF"), a wholly-owned special purpose limited liability company, successfully completed an opportunistic refinancing of its Series 2009-1 Variable Funding Rental Car Asset Backed Notes (the "Series 2009-1 Notes").

Mark P. Frissora, the Chairman and Chief Executive Officer of Hertz Holdings, said, "With this refinancing we were able to significantly reduce the interest rates on our Series 2009-1 Notes and we expect that this should result in savings of more than $20 million of fleet interest expense in 2011. We have now completed our 2010 refinancing efforts, resulting in a meaningful extension and smoothing of the maturity profile of Hertz fleet and corporate debt at attractive rates, while also enhancing the Company's overall liquidity position."

The refinancing of the Series 2009-1 Notes (among other things), reduced the drawn margin by 160 basis points, reduced the unused fees substantially, raised the effective advance rate while increasing the credit rating on the Series 2009-1 Notes from "Aa1" to "Aaa" (Moody's) and extended the expected maturity of the facility to March 2013 (with Controlled Amortization Payment Dates between January 2013 and March 2013). The aggregate maximum principal amount of the Series 2009-1 Notes facility is $1.94 billion, $1.05 billion of which was funded as of December 16, 2010.

Hertz Holdings also announced today that, simultaneous with the closing of the Series 2009-1 Notes, HVF successfully completed a $200 million issuance of Series 2010-2 Variable Funding Rental Car Asset Backed Notes (the "Series 2010-2 Notes"), with an expected maturity of March 2013 (with Controlled Amortization Payment Dates between January 2013 and March 2013). The terms of the Series 2010-2 Notes are similar to the terms of the Series 2009-1 Notes, but the Series 2010-2 Notes are secured by a pool of collateral segregated from the collateral securing HVF's other outstanding notes (including the Series 2009-1 Notes) and the drawn margin under the Series 2010-2 Notes is 10 basis points higher than the drawn margin under the Series 2009-1 Notes. Currently, no amounts have been funded under the Series 2010-2 VFN Notes. The Series 2010-2 Notes are not rated.

Hertz Holdings also announced today that, on December 7, 2010, its wholly owned Australian operating subsidiary successfully completed the fleet debt refinancing for its rental fleet with the funding of the Australian Securitization (as defined below). On November 23, 2010, a special purpose subsidiary that is wholly owned by Hertz Holding's Australian operating subsidiary entered into a 250 million Australian dollar asset backed securitization facility with an expected maturity date of December 2012 (the "Australian Securitization"), the proceeds of which were used to refinance the Australian dollar-denominated portion of the International ABS Fleet Facility, which was due to mature on December 21, 2010. The International ABS Fleet Financing Facility has now been terminated.

About Hertz

Hertz is the world's largest general use car rental brand, operating from approximately 8,500 locations in 146 countries worldwide. Hertz is the number one airport car rental brand in the U.S. and at 81 major airports in Europe, operating both corporate and licensee locations in cities and airports in North America, Europe, Latin America, Asia, Australia and New Zealand. In addition, the Company has licensee locations in cities and airports in Africa and the Middle East. Product and service initiatives such as Hertz #1 Club Gold®, NeverLost® customized, onboard navigation systems, SIRIUS XM Satellite Radio, and unique cars and SUVs offered through the Company's Prestige, Fun and Green Collections, set Hertz apart from the competition. In 2008, the Company launched Connect by Hertz, entering the global car sharing market in London, New York City and Paris. Hertz also operates one of the world's largest equipment rental businesses, Hertz Equipment Rental Corporation, offering a diverse line of equipment, including tools and supplies, as well as new and used equipment for sale, to customers ranging from major industrial companies to local contractors and consumers from approximately 320 branches in the United States, Canada, China, France, Spain and Italy.

Forward-Looking Statements

Certain statements contained in this press release include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include information concerning Hertz and Hertz Holdings' outlook, anticipated revenues and results of operations, as well as any other statement that does not directly relate to any historical or current fact. These forward-looking statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that Hertz and Hertz Holdings have made in light of their experience in the industry as well as their perceptions of historical trends, current conditions, expected future developments and other factors that Hertz and Hertz Holdings believe are appropriate in these circumstances. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative.

Among other items, such factors could include: overall strength and stability of general economic conditions, both in the United States and in global markets; levels of travel demand, particularly with respect to airline passenger traffic in the United States and in global markets; significant changes in the competitive environment, including as a result of industry consolidation, and the effect of competition in our markets, including on our pricing policies or use of incentives; our ability to achieve cost savings and efficiencies and realize opportunities to increase productivity and profitability; an increase in our fleet costs as a result of an increase in the cost of new vehicles and/or a decrease in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs; our ability to accurately estimate future levels of rental activity and adjust the size of our fleet accordingly; our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning equipment and to refinance our existing indebtedness; safety recalls by the manufacturers of our vehicles and equipment; a major disruption in our communication or centralized information networks; financial instability of the manufacturers of our vehicles and equipment; any impact on us from the actions of our licensees, dealers and independent contractors; our ability to maintain profitability during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease); shortages of fuel and increases or volatility in fuel costs; our ability to successfully integrate future acquisitions and complete future dispositions; costs and risks associated with litigation; risks related to our indebtedness, including our substantial amount of debt and our ability to incur substantially more debt; our ability to meet the financial and other covenants contained in our senior credit facilities, our outstanding unsecured senior notes and certain asset-backed funding arrangements; changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on earnings; changes in the existing, or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect our operations, the cost thereof or applicable tax rates; the effect of tangible and intangible asset impairment charges; and the impact of our derivative instruments, which can be affected by fluctuations in interest rates; our exposure to fluctuations in foreign exchange rates. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Hertz and Hertz Holdings therefore caution you against relying on these forward-looking statements. All forward-looking statements attributable to Hertz and Hertz Holdings or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and Hertz and Hertz Holdings undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.