Hertz, ABS Lenders Reach $650 Million Deal Over Fleet Reduction

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

  • Hertz (NYSE:HTZ) reached a deal with its asset-backed security (ABS) lenders over its fleet reduction plan, the Wall Street Journal (WSJ) reported.
Image of Hertz (<a href=

Source: Eric Glenn/

  • Under the tentative deal, Hertz will dispose of more than 182,500 leased vehicles, maintaining 310,000, by year end. It will be able to keep $900 of the proceeds from each vehicle sold.
  • The ABS lenders have opposed a fleet-reduction plan because the master lease prohibits Hertz from treating its fleet as if it operated under multiple leases.
  • Hertz will make $650 million in lease payments through year-end to its creditors. A person familiar with the matter told the WSJ that the payments are about half of what the car rental company is contractually obligated to make.
  • The person added that Hertz is trying to secure up to $2 billion in financing to get through the bankruptcy process.
  • The settlement also offers a way for Hertz to repurchase or lease as many as 40,000 vehicles from the lenders group.
  • Yesterday, InvestorPlace contributor David Moadel cited as “spin” the bankrupt company’s strategy to reduce “planned fleet levels through vehicle sales and by canceling fleet orders.” He advised that “A clear-headed look at Hertz stock strongly suggests that the company not only won’t be saved, but isn’t even worth saving.”

The post Hertz, ABS Lenders Reach $650 Million Deal Over Fleet Reduction appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos


InvestorPlace is one of America’s largest, longest-standing independent financial research firms. Started over 40 years ago by a business visionary named Tom Phillips, we publish detailed research and recommendations for self-directed investors, financial advisors and money managers.

Learn More