Hertz completes $425 million exchangeable senior notes offering

ESTERO, Fla. - Hertz Global Holdings, Inc. (NASDAQ:HTZ) announced Monday that its subsidiary, The Hertz Corporation, has completed an offering of $425 million in 5.500% Exchangeable Senior Notes due 2030, which included the full exercise of the initial purchasers’ option to purchase an additional $50 million. According to InvestingPro data, this financing comes as the company faces challenges with short-term obligations exceeding liquid assets, reflected in a current ratio of 0.85.

The rental car company reported that Pershing Square Capital Management L.P. was among the notable investors participating in the offering, which was oversubscribed. The transaction adds to the company’s financial resources as it continues its corporate transformation efforts. The company’s stock has shown strong momentum, with InvestingPro data showing an impressive 64% return over the past six months, despite currently trading above its Fair Value.

"The decision by Pershing Square and other key Hertz investors to increase their long economic exposure to the company, combined with the oversubscription of this offering, underscores the strong confidence in our company," said Scott Haralson, Chief Financial Officer at Hertz, according to a company press release.

Hertz Global Holdings operates the Hertz, Dollar, Thrifty and Firefly vehicle rental brands across more than 11,000 rental locations in 160 countries. The company also runs Hertz Car Sales and the Hertz 24/7 car sharing business in Europe.

The company did not specify how it plans to use the proceeds from the notes offering in its announcement. Additional details about the transaction were filed with the U.S. Securities and Exchange Commission.

The notes offering comes as Hertz continues to implement its business transformation strategy following challenges in recent years. The rental car company has been working to reposition itself in the competitive mobility market.

In other recent news, Hertz Global Holdings, Inc. completed an offering of $425 million in 5.500% exchangeable senior notes due 2030. This includes the full exercise of an option allowing initial purchasers to acquire an additional $50 million in notes. The notes will mature on October 1, 2030, with interest paid semi-annually starting April 1, 2026. Earlier, Hertz had announced plans to issue $375 million in exchangeable senior notes, which was an increase from a previously planned $250 million offering. The notes are initially exchangeable at a rate of 108.2808 shares of Hertz common stock per $1,000 principal amount. The company had initially intended to offer $250 million in notes, with an option for purchasers to buy an additional $37.5 million. These developments reflect Hertz’s strategic financial maneuvers to strengthen its capital structure.

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