Hertz plans $300M note offering and separate stock sale

Hertz Global Holdings, Inc. (NASDAQ: HTZ) announced that its subsidiary, The Hertz Corporation, intends to offer $300 million in aggregate principal amount of Exchangeable Senior First-Lien Secured PIK Notes due 2030 in a private placement to qualified institutional buyers under Rule 144A.

The Hertz Corporation also expects to grant initial purchasers an option to buy up to an additional $45 million in notes within 13 days of issuance. The notes will mature on July 1, 2030, with interest paid semi-annually beginning January 1, 2027, in a combination of cash and PIK interest. The specific interest rate and exchange rate will be determined through negotiations with initial purchasers.

The notes will be exchangeable into cash, shares of Hertz common stock, or a combination, at The Hertz Corporation's election. Shares issued upon exchange may not exceed 19.9% of outstanding common stock without shareholder approval. Holders may require repurchase at 100% of capitalized principal upon a fundamental change event. The Hertz Corporation may redeem the notes on or after January 6, 2029, if the stock price reaches at least 130% of the exchange price for specified periods.

Proceeds are intended for general corporate purposes, which may include repayment of outstanding debt.

Separately, Hertz announced a concurrent registered public offering of $100 million of common stock. Those shares will be loaned to a financial institution acting as underwriter under a share lending agreement. Hertz will not receive proceeds from that offering, though it will collect a nominal lending fee. The share borrower has indicated it intends to use the resulting short position to facilitate hedging by note investors, which could affect the market price of the common stock or notes.

The concurrent stock offering is contingent on closing of the notes offering, but the notes offering is not contingent on the stock offering closing.

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