Business Context and Reporting Period
This Form 8-K was filed by Hertz Global Holdings, Inc. on May 19, 2009. The report details the entry into material definitive agreements by The Hertz Corporation and its indirect subsidiary, Hertz Vehicle Financing LLC (HVF), regarding modifications to their asset-backed financing facilities.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures. The only specific financial metric disclosed is the availability of $825 million under the Series 2008-1 variable funding notes. The company states it currently has no borrowings outstanding under these notes.
Material Changes and Agreements
On May 19, 2009, the company executed six modifications to documents underlying its asset-backed financing facilities, including amendments to the Series 2005-1 and Series 2005-2 Supplements and agreements with insurers MBIA and Ambac. Key changes include:
- Clarification of how manufacturer bankruptcy events (specifically Ford, General Motors, and Chrysler) affect the calculation of the "Non-Eligible Manufacturer Amount."
- Establishment of conditions for accessing the $825 million availability under the Series 2008-1 Notes in the event of a manufacturer default or bankruptcy.
Outlook, Risks, and Management Commentary
Management intends to seek amendments to the Series 2008-1 Notes or the Side Letters to secure unrestricted access to the $825 million facility, though there is no assurance this will be achieved. Access to these funds currently requires satisfying specific conditions, such as curing a manufacturer default or the manufacturer emerging from bankruptcy. The company currently does not need to draw on these commitments due to sufficient and less expensive capacity under other credit facilities, absent a significant increase in new car needs.
Investor Verification Checklist
- Verify the current status of bankruptcy proceedings for General Motors, Ford, and Chrysler and their impact on Hertz's financing covenants.
- Confirm whether the company has successfully amended the Series 2008-1 Notes or Side Letters to remove access restrictions.
- Review the terms of Hertz's other credit facilities to understand the "less expensive capacity" referenced by management.
- Monitor future filings for any actual drawdowns on the Series 2008-1 Notes.