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.


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