Hertz to issue $375 million in exchangeable senior notes due 2030

ESTERO, Fla. - Hertz Global Holdings, Inc. (NASDAQ:HTZ), the $2.17 billion market cap car rental giant with a notably high beta of 2.14, announced Thursday that its subsidiary, The Hertz Corporation, has entered into an agreement to sell $375 million in 5.500% Exchangeable Senior Notes due 2030 in a private offering. According to InvestingPro data, this debt offering comes at a time when the company’s total debt to capital ratio stands at 0.90. The offering, which was increased from the previously announced $250 million, is expected to close around September 29, subject to customary conditions.

The notes will bear interest at 5.500% per year, payable semi-annually, and will mature on October 1, 2030. They will be initially exchangeable at a rate of 108.2808 shares of Hertz common stock per $1,000 principal amount, representing an exchange price of approximately $9.24 per share—a 32.5% premium over Wednesday’s closing price of $6.97.

According to the press release, Hertz expects to generate approximately $360.13 million in net proceeds from the issuance. The company plans to use $33.26 million to fund capped call transactions, $300 million for partial redemption of its Senior Notes due 2026, and the remainder for general corporate purposes, which may include debt repayment. This debt management strategy is particularly significant given that InvestingPro analysis shows the company’s current ratio at 0.85, indicating that short-term obligations exceed liquid assets.

In connection with the offering, Hertz has entered into privately negotiated cash-settled capped call transactions with certain initial purchasers or their affiliates. The cap price of these transactions is initially set at $13.94 per share, representing a 100% premium above the last reported sale price of Hertz common stock.

The company also disclosed that affiliates of Pershing Square Capital Management have entered into privately negotiated cash-settled total return swap transactions with a counterparty related to approximately $125 million notional amount of Hertz common stock.

The notes and their guarantees will be offered and sold only to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and have not been registered under the Securities Act or any state securities laws.

Hertz Global Holdings operates the Hertz, Dollar, Thrifty, and Firefly vehicle rental brands with more than 11,000 locations across 160 countries. The stock has shown remarkable momentum with a 90.44% return year-to-date, though InvestingPro analysis suggests the stock is currently trading above its Fair Value. Investors seeking deeper insights can access comprehensive analysis and 7 additional ProTips through InvestingPro’s detailed research report.

In other recent news, Hertz Global Holdings, Inc. has announced a $250 million offering in exchangeable senior notes due in 2030. This private offering, exempt from registration requirements, includes an option for initial purchasers to acquire an additional $37.5 million in notes. In another development, Hertz is set to receive a settlement distribution of over $154 million related to the In re Automotive Parts Antitrust Litigation. The gross distribution was initially $171 million, with deductions for applicable fees. Additionally, Hertz has reported the upcoming resignation of Eric Leef, its Executive Vice President and Chief Human Resources Officer, effective September 2025. Christopher G. Berg will oversee the human resources function during the transition, and the company is actively seeking a permanent successor. These developments reflect Hertz’s ongoing strategic and operational adjustments.

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