Comprised of $500
Million of First Lien Senior Secured Notes and $250 Million of Exchangeable Senior Second-Lien
Secured PIK Notes Issued by The Hertz Corporation
ESTERO,
Fla., June 20, 2024 /PRNewswire/ -- Hertz
Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz" or the "Company"), a
leading global rental car company, today announced that its
wholly-owned indirect subsidiary, The Hertz Corporation ("Hertz
Corp."), intends to offer, subject to market and other conditions,
$500 million in aggregate principal
amount of First Lien Senior Secured Notes due 2029 (the "First Lien
Notes") and $250 million in aggregate
principal amount of Exchangeable Senior Second-Lien Secured PIK
Notes due 2029 (the "Exchangeable Notes" and, together with the
First Lien Notes, the "Notes"), in private offerings exempt from
the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act").
Concurrently with the offerings of the Notes,
investors affiliated with CK Amarillo LP have committed to Hertz
Corp. and an investor has provided a firm commitment to an initial
purchaser to purchase up to $250
million aggregate principal amount of Exchangeable Notes. In
addition, Hertz Corp. has received a backstop commitment to
purchase up to $500 million aggregate
principal amount of First Lien Notes.
Hertz Corp. intends to use the net proceeds of
the offerings to pay down a portion of its $2.0 billion committed revolving credit facility,
improving liquidity. The completion of the offering of the First
Lien Notes and the completion of the offering of the Exchangeable
Notes are not contingent on each other.
The Exchangeable Notes will bear PIK interest payable
semi-annually in arrears on June 15
and December 15 of each year,
beginning on December 15, 2024. Hertz
Corp. expects that the initial exchange price for the Exchangeable
Notes will be at a 100% premium to the volume-weighted average
price of the common stock of the Company ("Common Stock") on the
date of pricing of the Exchangeable Notes, but in no event greater
than $7.00 or less than $6.00 per share of Common Stock. The interest
rate and certain other terms of the Exchangeable Notes will be
determined by negotiations between Hertz Corp. and the initial
purchasers. The Exchangeable Notes will mature on June 15, 2029, unless repurchased, redeemed or
exchanged in accordance with their terms prior to maturity. Prior
to March 15, 2029, the Exchangeable
Notes will be exchangeable only upon satisfaction of certain
conditions and during certain periods, and thereafter, the
Exchangeable Notes will be exchangeable at any time until the close
of business on the second scheduled trading day immediately
preceding the maturity date. The Exchangeable Notes will be
exchangeable on the terms set forth in the indenture into cash,
shares of Common Stock, or a combination thereof, at Hertz Corp.'s
election.
Holders of the Exchangeable Notes will have the right to require
Hertz Corp. to repurchase all or a portion of their Exchangeable
Notes at 100% of their initial principal amount of the Exchangeable
Notes to be repurchased plus PIK interest on such
Exchangeable Notes for each interest payment date occurring on or
prior to the repurchase date plus accrued and unpaid PIK
interest to, but excluding, the date of such repurchase, upon the
occurrence of certain corporate events constituting a "fundamental
change" as defined in the indenture governing the Exchangeable
Notes. Hertz Corp. may not redeem the Exchangeable Notes prior to
June 21, 2027. On or after
June 21, 2027 and on or prior to the
31st scheduled trading day immediately preceding the maturity date,
if the last reported sale price per share of Common Stock has been
at least 250% of the exchange price for the Exchangeable Notes for
certain specified periods, Hertz Corp. may redeem all (but not
part) of the Exchangeable Notes at a cash redemption price equal to
the initial principal amount of the Exchangeable Notes to be
redeemed plus PIK interest on such Exchangeable Notes for
each interest payment date occurring on or prior to the redemption
date plus accrued and unpaid PIK interest on such
Exchangeable Notes to, but not including, the redemption date.
The Notes are expected to be guaranteed by the Company, Rental
Car Intermediate Holdings, LLC, Hertz Corp.'s direct parent
company, and each of Hertz Corp.'s existing domestic subsidiaries
and future restricted subsidiaries that guarantees indebtedness
under Hertz Corp.'s first lien credit facilities or certain other
indebtedness for borrowed money. The First Lien Notes and the
related guarantees (other than the guarantee by the Company) are
expected to be secured (subject to certain exceptions and permitted
liens) on a first-lien basis by the same assets (other than certain
excluded property) that secure indebtedness under Hertz Corp.'s
first lien credit facilities (the "Collateral") and are therefore
expected to be effectively pari passu with indebtedness
under Hertz Corp.'s first lien credit facilities. The Exchangeable
Notes and the related guarantees (other than the guarantee by the
Company) are expected to be secured (subject to certain exceptions
and permitted liens) on a second-lien basis by the Collateral and
are therefore expected to be effectively junior to the First
Lien Notes and indebtedness under Hertz Corp.'s first lien credit
facilities.
The Notes and the guarantees of the Notes are being offered only
to persons reasonably believed to be qualified institutional buyers
pursuant to Rule 144A under the Securities Act and, except for the
Exchangeable Notes and the related guarantees, to non-U.S. persons
outside the United States pursuant
to Regulation S under the Securities Act. The Notes, the guarantees
of the Notes and any shares of Common Stock issuable upon exchange
of the Exchangeable Notes have not been and will not be registered
under the Securities Act or the securities laws of any other
jurisdiction and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements under the
Securities Act and the securities laws of any other
jurisdiction.
This press release is not an offer to sell or purchase, or a
solicitation of an offer to sell or purchase, the Notes, the
guarantees of the Notes or the shares of Common Stock issuable upon
exchange of the Exchangeable Notes and shall not constitute an
offer, solicitation or sale in any state or jurisdiction in which,
or to any person to whom such an offer, solicitation or sale would
be unlawful.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings,
Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands
throughout North America,
Europe, the Caribbean, Latin
America, Africa, the
Middle East, Asia, Australia and New
Zealand. The Hertz Corporation is one of the largest
worldwide vehicle rental companies, and the Hertz brand is one of
the most recognized globally. Additionally, The Hertz Corporation
owns and operates the Firefly vehicle rental brand and Hertz 24/7
car sharing business in international markets and sells vehicles
through Hertz Car Sales.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within
the meaning of the federal securities laws. Words such as "expect,"
"will" and "intend" and similar expressions identify
forward-looking statements, which include but are not limited to
statements related to our positioning, strategy, vision, forward
looking investments, conditions in the travel industry, our
financial and operational condition, our sources of liquidity, the
proposed offerings, the anticipated terms of the Notes and Hertz
Corp.'s expected use of proceeds from the proposed offerings. We
caution you that these statements are not guarantees of future
performance and are subject to numerous evolving risks and
uncertainties that we may not be able to accurately predict or
assess, including risks and uncertainties related to completion of
the offerings on the anticipated terms or at all, market conditions
(including market interest rates) and the satisfaction of customary
closing conditions related to the offerings, unanticipated uses of
capital and those in our risk factors that we identify in the
offering memorandums for these offerings and our most recent annual
report on Form 10-K for the year ended December 31, 2023, as filed with the U.S.
Securities and Exchange Commission on February 12, 2024, and any updates thereto in the
Company's quarterly reports on Form 10-Q and current reports on
Form 8-K. We caution you not to place undue reliance on our
forward-looking statements, which speak only as of their date, and
we undertake no obligation to update this information.
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SOURCE Hertz Global Holdings, Inc.