HTZ Hertz Global Holdings Inc

Item 1.01 Entry into a Material Definitive Agreement

HVF III Rental Car Backed Note Offerings

On January 19, 2022, Hertz Vehicle Financing III LLC (“HVF III”), a wholly-owned, special-purpose and bankruptcy remote subsidiary of The Hertz Corporation (“THC”), issued two series of notes to unaffiliated third parties: (1) the Series 2022–1 Fixed Rate Rental Car Asset Backed Notes, Class A, Class B, and Class C, in an aggregate principal amount equal to $652,500,000 pursuant to the Series 2022-1 Supplement (the “Series 2022-1 Supplement”), dated as of January 19, 2021, among HVF III, as issuer, THC, as administrator, and The Bank of New York Mellon Trust Company, N.A. (“BNYM”), as trustee, to the Base Indenture (the “Base Indenture”), dated as of June 29, 2021, which was previously filed as Exhibit 10.7 to the Current Report on Form 8-K filed on July 7, 2021, and (2) the Series 2022–2 Fixed Rate Rental Car Asset Backed Notes, Class A, Class B, and Class C, in an aggregate principal amount equal to $652,500,000 pursuant to the Series 2022-2 Supplement (the “Series 2022-2 Supplement”), dated as of January 19, 2021, among HVF III, as issuer, THC, as administrator, and BNYM, as trustee, to the Base Indenture. In addition, HVF III also issued (1) the Series 2022-1 Fixed Rate Rental Car Asset Backed Notes, Class D, in an aggregate principal amount equal to $97,500,000, pursuant to the Series 2022-1 Supplement, which were purchased by THC and (2) the Series 2022-2 Fixed Rate Rental Car Asset Backed Notes, Class D, in an aggregate principal amount equal to $97,500,000, pursuant to the Series 2022-2 Supplement which were purchased by THC.

The Series 2022-1 Fixed Rate Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D (collectively, the “Series 2022-1 Notes”) and the Series 2022-2 Fixed Rate Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D (collectively, the “Series 2022-2 Notes”) are described together below as the “Series 2022 Notes.”

THC utilizes the HVF III securitization platform to finance its U.S. rental car fleet. Subject to certain conditions, additional notes may be issued in the future under the Base Indenture.

The Series 2022 Notes were issued with the following terms:

The Series 2022-1 Class B Notes are subordinated to the Series 2022-1 Class A Notes. The Series 2022-1 Class C Notes are subordinated to the Series 2022-1 Class A Notes and the Series 2022-1 Class B Notes. The Series 2022-1 Class D Notes are subordinated to the Series 2022-1 Class A Notes, the Series 2022-1 Class B Notes, and the Series 2022-1 Class C Notes.

The Series 2022-2 Class B Notes are subordinated to the Series 2022-2 Class A Notes. The Series 2022-2 Class C Notes are subordinated to the Series 2022-2 Class A Notes and the Series 2022-2 Class B Notes. The Series 2022-2 Class D Notes are subordinated to the Series 2022-2 Class A Notes, the Series 2022-2 Class B Notes, and the Series 2022-2 Class C Notes.

Unless an amortization event occurs, HVF III is not required to make any principal payments on (i) the Series 2022-1 Notes until January 2025, and (ii) the Series 2022-2 Notes until January 2027. Beginning in January 2025 for the Series 2022-1 Notes and January 2027 for the Series 2022-2 Notes, HVF III is expected to make a payment of one-sixth of the initial principal amount until repayment is made in full on the applicable legal final payment date for such series of notes in June 2026 and June 2028, respectively.

The occurrence and continuation of an amortization event related to the Series 2022 Notes may result in HVF III being required to pay principal on the Series 2022 Notes earlier than anticipated. Amortization events include, among other things, the failure to pay principal or interest in a timely manner, the failure to maintain sufficient assets compared to the outstanding amount of debt, the failure to maintain sufficient liquidity in the form of reserve accounts or letters of credit, the presence of certain liens on HVF III’s assets, any misrepresentations by HVF III, any covenant defaults and defaults by either HVF III or THC, as administrator of HVF III under the Administration Agreement dated as of June 29, 2021, which was previously filed as Exhibit 10.9 to the Current Report on Form 8-K filed on July 7, 2021. In the event that one or more amortization events occurs and is continuing, holders of the Series 2022 Notes may force HVF III or BNYM on their behalf to sell vehicles and, if a default occurs under the Master Motor Vehicle Operating Lease and Servicing Agreement (HVF III) (the “Lease”) dated as of June 29, 2021, which was previously filed as Exhibit 10.8 to the Current Report on Form 8-K filed on July 7, 2021, the holders of the Series 2022 Notes may force THC and/or DTG Operations, each as a lessee under the Lease, to return vehicles for sale by HVF III. Proceeds of any such sales made during the enforcement of remedies are required to repay the Series 2022 Notes and any notes issued by HVF III in the future.

The proceeds of the Series 2022 Notes were used in part to repay the amounts outstanding on HVF III’s Series 2021-A Variable Funding Rental Car Asset Backed Notes. Remaining funds are expected to be used for the future acquisition or refinancing of vehicles to be leased under the Lease.

The foregoing descriptions of the Series 2022 Notes are qualified in their entirety by reference to the complete terms and conditions of the Series 2022-1 Supplement and the Series 2022-2 Supplement, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, which are incorporated by reference herein.