Business Context and Reporting Period
This Form 8-K, dated August 27, 2026, reports on Hertz Global Holdings, Inc. and its subsidiary, The Hertz Corporation (THC). The filing details the entry into material definitive agreements regarding the issuance of rental car asset-backed notes by Hertz Vehicle Financing III LLC (HVF III), a wholly-owned, bankruptcy-remote special-purpose subsidiary of THC. These financings are utilized to fund THC's U.S. rental car fleet.
Key Financial Metrics and Transaction Details
HVF III issued two series of Fixed Rate Rental Car Asset Backed Notes (collectively the "Series 2026 Notes") to unaffiliated third parties, with additional Class E notes purchased by THC.
| Note Series | Principal Amount (Third Parties) | Principal Amount (THC Purchase) | Total Principal | Interest Rate Range | Expected Final Payment |
|---|---|---|---|---|---|
| Series 2026-3 | $357,750,000 | $17,250,000 | $375,000,000 | 5.51% - 10.33% | February 2030 |
| Series 2026-4 | $477,000,000 | $23,000,000 | $500,000,000 | 5.87% - 11.35% | February 2032 |
| Total Issuance | $834,750,000 | $40,250,000 | $875,000,000 | 5.51% - 11.35% | N/A |
Repayment Terms: Unless an amortization event occurs, no principal payments are required until September 2029 (Series 2026-3) and September 2031 (Series 2026-4). Thereafter, principal is expected to be repaid in six equal installments.
Use of Proceeds: Net proceeds were used to repay outstanding amounts on HVF III's Series 2021-A Variable Funding Rental Car Asset Backed Notes. Remaining funds are designated for the future acquisition or refinancing of eligible vehicles.
Material Changes and Liquidity
The filing represents a significant refinancing activity, replacing variable funding notes with fixed-rate asset-backed notes. This transaction alters the company's debt maturity profile and interest rate exposure for the U.S. fleet.
- Debt Structure: The notes are structured with multiple tranches (Classes A through E), where Classes B through E are subordinated to the preceding classes.
- Liquidity Impact: The transaction provides immediate liquidity for fleet acquisition and refinancing while extending the maturity horizon for a portion of the debt.
Outlook, Risks, and Contingencies
Amortization Events: The filing highlights significant contingencies. If an "amortization event" occurs, HVF III may be required to repay principal earlier than anticipated. Triggers include:
- Failure to pay principal or interest timely.
- Failure to maintain sufficient assets relative to outstanding debt.
- Failure to maintain sufficient liquidity in reserve accounts or letters of credit.
- Presence of certain liens on assets or covenant defaults.
Enforcement Remedies: In the event of an amortization event or default, noteholders may force the sale of vehicles. Proceeds from such sales must be used to repay the notes. Additionally, if a default occurs under the Master Motor Vehicle Operating Lease, noteholders may force THC or its subsidiary to return vehicles for sale.
Future Issuances: Subject to conditions, additional notes may be issued in the future under the Base Indenture.
Investor Verification Checklist
- Verify the specific interest rates and tranche sizes for the Series 2026-3 and Series 2026-4 notes in the attached Exhibits 10.1 and 10.2.
- Confirm the current status of HVF III's asset coverage ratios and liquidity reserves to assess the risk of an immediate amortization event.
- Review the terms of the "Master Motor Vehicle Operating Lease" to understand the specific triggers for vehicle return and sale.
- Monitor the repayment schedule for the Series 2021-A Variable Funding Notes to confirm the extent of refinancing completed.
- Assess the impact of the new fixed-rate debt on Hertz's overall interest expense and cash flow projections.