S&P Raises Hertz Global Holdings’ Ratings

Standard & Poor's Ratings Services elevated its ratings for Hertz Global Holdings Inc., citing improved operating and financial performance by the two car rental companies.

The firm raised its corporate credit ratings on Park Ridge, N.J.-based Hertz and subsidiary Hertz Corp. to "B+" from "B" and removed them from review status. The ratings had been under review since April, after Hertz announced it had signed an agreement to acquire Dollar Thrifty Automotive Group.

Shareholders for Dollar Thrifty rejected the takeover bid in September.

S&P said its outlook on Hertz is stable, even without the benefits of a Dollar Thrifty acquisition.

"The upgrade reflects Hertz's improved operating and financial performance, which we expect to be sustained, even without its acquisition of (Dollar Thrifty)," said S&P credit analyst Betsy Snyder.

The analyst noted that Hertz has benefited from stronger demand in both its car and equipment-rental operations, higher prices on leisure-car rentals and substantial cost cuts, which it targets at $410 million this year.

That helped Hertz boost its adjusted operating margin for the 12 months ended in September to 10.4 percent from 5.7 percent last year.

Snyder said she anticipates Hertz's capital spending, earnings and cash flow will increase next year, keeping its credit profile relatively consistent through 2011.

 

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.