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Hertz's (HTZ) Unit Completes Notes Offering of $780M - Analyst Blog

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Hertz Global Holdings, Inc.HTZ announced the completion of a notes offering by its wholly owned subsidiary, Hertz Vehicle Financing II LP ("HVF II"). Hertz stated that HVF II has issued Series 2015-1 Rental Car Asset Backed Notes, with the total principal amounting to $780 million.

These notes, due to mature in Mar 2020, comprise Class A, Class B and Class C notes, with principal amounts of $622.44 million, $118.529 million and $39.031 million, respectively. Also, the notes bear respective interest rates of 2.73%, 3.52% and 4.35%.

The company primarily plans to utilize the proceeds from this offering for the repayment of the outstanding principal amounts of HVF II's Series 2013-A and HVF II's Series 2014-A Variable Funding Notes. Apart from this, the sale proceeds from the offering, which closed yesterday, will be used to make loans to Hertz Vehicle Financing LLC ("HVF").

HVF, a special purpose subsidiary of Hertz, is expected to use the proceeds from the aforementioned loan to purchase or refinance vehicles to be leased to Hertz's subsidiaries - The Hertz Corporation or DTG Operations, Inc.

HVF II is also a special purpose subsidiary of Hertz. Hertz uses the securitization platform of the former to sponsor its U.S. rental car fleet. The company recently stated that it is going about its fleet capacity enhancement plan in a more disciplined manner by targeting profitable areas, which makes it confident of completing its fleet transformation a month ahead of the original mid-2015 schedule.

However, Hertz currently carries a Zacks Rank #4 (Sell). The company continues to grapple with its accounting review owing to the identification of certain errors in its financial results for 2011, due to which it will be unable to file any updated statements before mid-2015. In fact, there is no guarantee of the process being completed by then.

Stocks to Consider

Better-ranked stocks in the same industry include Sajan, Inc. SAJA , with a Zacks Rank #1 (Strong Buy), ExamWorks Group, Inc. EXAM and Healthcare Services Group Inc. HCSG , each carrying a Zacks Rank #2 (Buy).

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SAJAN INC (SAJA): Free Stock Analysis Report

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


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

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