Hertz Shares Slip On Heels Of Debt Offering: What's Going On?

BY Benzinga | CORPORATE | 06/20/24 12:40 PM EDT

Hertz Global Holdings, Inc. (HTZ) shares are trading lower on Thursday.

The company’s shares dipped after it announced a debt offering worth $750 million.

The debt offering aims to bolster its financial position and support future profitability. Hertz intends to offer?$500 million?in aggregate principal amount of First Lien Senior Secured Notes due 2029.

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The car rental company also plans to offer $250 million?in aggregate principal amount of Exchangeable Senior Second-Lien Secured PIK Notes due 2029.

Investors affiliated with CK Amarillo LP have committed to the unit. 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 has received a backstop commitment to purchase up to?$500 million?aggregate principal amount of First Lien Notes.

The firm plans to utilize the funds raised from the offerings to reduce a portion of its $2.0 billion committed revolving credit facility, thereby enhancing its liquidity.

The completion of the First Lien Notes and Exchangeable Notes offerings are independent of each other.

Price Action: HTZ shares are trading lower by 0.16% to $3.08?at last check Thursday.

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Disclaimer: Editors reviewed and produced this content with the help of AI tools.

Image: Shutterstock

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Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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