Comprised of $750
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 21, 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."), has
entered into agreements to sell $750
million (representing an upsize from the previously
announced $500 million) aggregate
principal amount of 12.625% First Lien Senior Secured Notes due
2029 (the "First Lien Notes") and $250
million aggregate principal amount of 8.000% 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"). The
offerings are each expected to close on or about June 28, 2024, subject to customary closing
conditions.
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 revolving credit facility will remain
available following the paydown, and total commitments under the
revolving credit facility will be unchanged as a result of the
offerings. 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 First Lien Notes will be issued at par and
will bear interest at a rate of 12.625% per annum payable
semi-annually in cash in arrears on January
15 and July 15 of each year,
beginning on January 15, 2025, and
will mature on July 15, 2029.
The Exchangeable Notes will bear PIK interest at
a rate of 8.000% per year payable semi-annually in arrears on
January 15 and July 15 of each year, beginning on January 15, 2025. The Exchangeable Notes will
mature on July 15, 2029, unless
repurchased, redeemed or exchanged in accordance with their terms
prior to maturity.
The exchange rate will initially be 150.9388
shares of Common Stock per $1,000
capitalized principal amount of Exchangeable Notes (equivalent to
an initial exchange price of approximately $6.6252 per share of Common Stock). The initial
exchange price of the Exchangeable Notes represents a premium of
approximately 89% to the $3.51
closing price of the Common Stock on the Nasdaq Global Select
Market on June 20, 2024. Prior to
April 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 of the Company ("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 July 20,
2027. On or after July 20,
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 were
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
offerings, the anticipated completion and timing of the offerings
and Hertz Corp.'s expected use of proceeds from the 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.
