Hertz Global Holdings Inc. announced Monday that, on Dec. 16, 2010, its subsidiary Hertz Vehicle Financing LLC ("HVF"), a wholly-owned special purpose limited liability company, successfully completed an opportunistic refinancing of its Series 2009-1 Variable Funding Rental Car Asset Backed Notes (the "Series 2009-1 Notes").
Mark P. Frissora, the chairman and chief executive officer of Hertz Holdings, said, "With this refinancing we were able to significantly reduce the interest rates on our Series 2009-1 Notes and we expect that this should result in savings of more than $20 million of fleet interest expense in 2011. We have now completed our 2010 refinancing efforts, resulting in a meaningful extension and smoothing of the maturity profile of Hertz fleet and corporate debt at attractive rates, while also enhancing the Company's overall liquidity position."
The refinancing of the Series 2009-1 Notes (among other things), reduced the drawn margin by 160 basis points, reduced the unused fees substantially, raised the effective advance rate while increasing the credit rating on the Series 2009-1 Notes from "Aa1" to "Aaa" (Moody's) and extended the expected maturity of the facility to March 2013 (with Controlled Amortization Payment Dates between January 2013 and March 2013). The aggregate maximum principal amount of the Series 2009-1 Notes facility is $1.94 billion, $1.05 billion of which was funded as of Dec.16, 2010.
Hertz Holdings also announced that, simultaneous with the closing of the Series 2009-1 Notes, HVF successfully completed a $200 million issuance of Series 2010-2 Variable Funding Rental Car Asset Backed Notes (the "Series 2010-2 Notes"), with an expected maturity of March 2013 (with Controlled Amortization Payment Dates between January 2013 and March 2013). The terms of the Series 2010-2 Notes are similar to the terms of the Series 2009-1 Notes, but the Series 2010-2 Notes are secured by a pool of collateral segregated from the collateral securing HVF's other outstanding notes (including the Series 2009-1 Notes) and the drawn margin under the Series 2010-2 Notes is 10 basis points higher than the drawn margin under the Series 2009-1 Notes. Currently, no amounts have been funded under the Series 2010-2 VFN Notes. The Series 2010-2 Notes are not rated.
In addition, Hertz Holdings announced that, on Dec. 7, 2010, its wholly owned Australian operating subsidiary successfully completed the fleet debt refinancing for its rental fleet with the funding of the Australian Securitization (as defined below). On Nov. 23, 2010, a special purpose subsidiary that is wholly owned by Hertz Holding's Australian operating subsidiary entered into a 250 million Australian dollar asset backed securitization facility with an expected maturity date of December 2012 (the "Australian Securitization"), the proceeds of which were used to refinance the Australian dollar-denominated portion of the International ABS Fleet Facility, which was due to mature on Dec. 21, 2010. The International ABS Fleet Financing Facility has now been terminated.