Business Context and Reporting Period
This Form 8-K filing by Hertz Global Holdings, Inc. (the "Company") reports a material definitive agreement entered into on October 23, 2009. The report was filed on October 29, 2009. The transaction involves Hertz Vehicle Financing LLC ("HVF"), a bankruptcy-remote special purpose entity wholly-owned by The Hertz Corporation, a subsidiary of the Company.
Key Financial Metrics and Transaction Details
HVF issued and sold $1.2 billion in aggregate principal amount of Series 2009-2 Rental Car Asset Backed Notes. The notes are rated "Aaa" by Moody's Investors Service and were sold to qualified institutional buyers under Rule 144A and to investors outside the U.S. under Regulation S.
- Total Issuance: $1.2 billion
- Three-Year Notes (Class A-1): $500 million principal; 4.26% coupon (4.30% yield); expected maturity March 2013.
- Five-Year Notes (Class A-2): $700 million principal; 5.29% coupon (5.35% yield); expected maturity March 2015.
The filing does not provide specific revenue, profit, cash flow, or margin figures for the Company, as this report focuses solely on the debt issuance.
Material Changes and Security Structure
The issuance represents a new direct financial obligation. The notes are secured by a pledge of collateral owned by HVF, including:
- The majority of the U.S. car rental fleet used in daily operations.
- Manufacturer receivables related to vehicles under repurchase programs.
- Rights under a master lease agreement between HVF and the Company.
- Funds in collection and cash collateral accounts.
Assets of HVF, including the U.S. fleet, are bankruptcy-remote and will not be available to satisfy claims of the Company's general creditors.
Outlook, Risks, and Covenants
HVF is subject to restrictive covenants regarding liens, indebtedness, mergers, asset dispositions, and dividends. The notes are subject to customary events of default and amortization events, including non-payment, covenant violations, and insolvency. An event of default could trigger rapid amortization of the notes and the liquidation of vehicles in the U.S. fleet. The filing notes that initial purchasers and the trustee may perform other financial services for the Company and receive customary fees.
Investor Verification Checklist
- Verify the specific terms of the "ABS Indenture" and the "Series 2009-2 Supplement" to understand the full scope of restrictive covenants.
- Confirm the exact composition of the collateral pool securing the $1.2 billion issuance.
- Review the Company's broader liquidity position and existing debt facilities to assess the impact of this new obligation on overall leverage.
- Monitor for any future filings regarding amortization events or covenant compliance.