TULSA, Okla., Feb. 10, 2011 /PRNewswire/ -- Dollar Thrifty
Automotive Group, Inc. (NYSE: DTG) today announced the completion
of a comprehensive amendment to its senior secured credit facility
designed to significantly enhance the Company's financing
flexibility and liquidity.
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Under the amended credit facility, the Company's ability to
borrow under the $231.3 million
revolving credit facility portion of the facility has been fully
restored, providing the Company access to additional liquidity for
general corporate purposes. Additionally, previous
limitations on the use of letters credit to meet credit enhancement
requirements on fleet financing facilities have been removed,
providing financing flexibility and expanded liquidity.
The Company also obtained enhanced flexibility on allocation of
capital and future investment decisions. As amended, the
credit facility permits the Company to complete certain franchise
acquisitions and provides for new investment baskets for both the
Company's vehicle financing subsidiary and Canadian subsidiary for
purposes of fleet purchases and temporary debt reduction. In
addition, the restricted payment basket in the facility was
reinstated and modified to permit share repurchases and
dividends.
"We appreciate the ongoing support of our lending group and
their recognition of the Company's dramatic improvement in
operating performance and financial condition," said Scott L. Thompson, President and Chief Executive
Officer. "The Company has a substantial cash position,
minimal corporate leverage and is generating significant operating
cash flow. This amendment provides us with additional
optionality in our mission to maximize profitability and
shareholder value."
In conjunction with the amendment, the prior minimum tangible
net worth and minimum cash covenants were eliminated and replaced
with two new financial covenants. The Company will now be
subject to a maximum leverage ratio of 2.25:1.00 and a minimum
interest coverage ratio of at least 2.00:1.00. The amendment
also eliminated the triggering of an event of default in the event
of a rapid amortization event under certain of the Company's asset
backed notes, to the extent that rapid amortization resulted from a
bankruptcy involving the monoline insurers of those notes.
The pricing and maturity date of both the revolving credit
facility and the Term Loan B facility remain unchanged in
conjunction with this amendment. The final maturity of both
facilities is scheduled for June
2013. Deutsche Bank Trust Company Americas acted as
Administrative Agent on the transaction.
About Dollar Thrifty Automotive Group, Inc.
Through its Dollar Rent A Car and Thrifty Car Rental brands, the
Company has been serving value-conscious leisure and business
travelers since 1950. The Company maintains a strong presence
in domestic leisure travel in virtually all of the top U.S. and
Canadian airport markets, and also derives a significant portion of
its revenue from international travelers to the U.S. under
contracts with various international tour operators. Dollar
and Thrifty have approximately 300 corporate locations in
the United States and Canada, with approximately 6,000 employees
located mainly in North America.
In addition to its corporate operations, the Company
maintains global service capabilities through an expansive
franchise network of over 1,250 franchises in 81 countries.
For additional information, visit www.dtag.com or the brand
sites at www.dollar.com and www.thrifty.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" about
our expectations, plans and performance. These statements use such
words as "may," "will," "expect," "believe," "intend," "should,"
"could," "anticipate," "estimate," "forecast," "project," "plan"
and similar expressions. These statements do not guarantee future
performance and Dollar Thrifty Automotive Group, Inc. assumes no
obligation to update them. Risks and uncertainties that could
materially affect future results include:
- the impact on our results and liquidity if we become obligated
to pay a termination fee to Hertz Global Holdings, Inc. ("Hertz"),
which will depend on whether we complete a qualifying business
combination transaction within 12 months of the October 1, 2010 termination date of our merger
agreement with Hertz, and whether and the extent to which the
relevant third party would bear all or any portion of that
fee;
- whether Avis Budget Group, Inc. ("Avis") would obtain
regulatory approval to engage in a business combination transaction
with us and, if so, the conditions upon which such approval would
be granted (including potential divestitures of assets or
businesses of either company), whether we and Avis would reach
agreement on the terms of such a transaction, whether our
stockholders would approve the transaction and whether other
conditions to consummation of the transaction would be satisfied or
waived;
- the risks to our business and prospects pending any future
business combination transaction, diversion of management's
attention from day-to-day operations, a loss of key personnel,
disruption of our operations, and the impact of pending or future
litigation relating to any business combination transaction;
- the risks to our business and growth prospects as a stand-alone
company, in light of our dependence on future growth of the economy
as a whole to achieve meaningful revenue growth in the key airport
and local markets we serve, high barriers to entry in the insurance
replacement market, and the impact of our limited financial
resources on our ability to finance growth through acquisitions or
to expand internationally;
- the impact of persistent pricing and demand pressures,
particularly in light of the continuing volatility in the global
financial and credit markets and concerns about global economic
prospects and the timing and strength of a recovery, and whether
consumer confidence and spending levels will improve;
- whether ongoing governmental and regulatory initiatives in
the United States and elsewhere to
stimulate economic growth will be successful;
- the impact of pricing and other actions by competitors,
particularly as they increase fleet sizes in anticipation of
seasonal activity;
- our ability to manage our fleet mix to match demand and meet
our target for vehicle depreciation costs, particularly in light of
the significant increase in the level of risk vehicles (i.e., those
vehicles not acquired through a guaranteed residual value program)
in our fleet and our exposure to the used vehicle market;
- the cost and other terms of acquiring and disposing of
automobiles and the impact of conditions in the used vehicle market
on our vehicle cost, including the impact on our results of
expected increases in our vehicle depreciation costs in 2011 based
on our current expectations with respect to the used vehicle
market, and our ability to reduce our fleet capacity as and when
projected by our plans;
- the timing and strength of a recovery in the U.S. automotive
industry, particularly in light of our dependence on vehicle supply
from U.S. automotive manufacturers;
- the effectiveness of actions we take to manage costs and
liquidity;
- our ability to obtain cost-effective financing as needed
(including replacement of asset backed notes and other indebtedness
as it comes due) without unduly restricting operational
flexibility;
- our ability to comply with financial covenants or to obtain
necessary amendments or waivers, and the impact of the terms of any
required amendments or waivers, such as potential reductions in
lender commitments;
- our ability to manage the consequences under our financing
agreements of an event of bankruptcy with respect to any of the
monoline insurers that provide credit support for our asset backed
financing structures, including Financial Guaranty Insurance
Company, which has indicated that it has not satisfied the
conditions for effectuating its surplus restoration plan as
required by the New York State
Insurance Department;
- whether our preliminary expectations about our federal income
tax exposure, after giving effect to the impact of the Tax Relief
Act, are affected by changes in our expected fleet size or
operations or further legislative initiatives relating to taxes in
the United States or elsewhere,
and whether the Company will, as expected, recover previous
overpayments in respect of U.S. federal income taxes in 2011;
- airline travel patterns, including disruptions or reductions in
air travel resulting from industry consolidation, capacity
reductions, pricing actions or other events, such as airline
bankruptcies;
- local market conditions where we and our franchisees do
business, including whether franchisees will continue to have
access to capital as needed;
- access to reservation distribution channels;
- disruptions in the operation or development of information and
communication systems that we rely on, including those relating to
methods of payment;
- the cost of regulatory compliance, costs and other effects of
potential future initiatives, including those directed at climate
change and its effects, and the costs and outcome of pending
litigation; and
- the impact of other events that can disrupt consumer travel,
such as natural and man-made catastrophes, pandemics and actual and
perceived threats or acts of terrorism.
Forward-looking statements should be considered in light of
information in this press release and other filings we make with
the Securities and Exchange Commission.
SOURCE Dollar Thrifty Automotive Group, Inc.