Moody’s Investors Service lowered Hertz Corp. ratings from “Ba3” to “B1,” citing expectations that the car rental business will remain weak through 2010, and Hertz’s cost for refinancing debt, according to the Associated Press.

Hertz has had a number of positive considerations, including a reduction of about $3 billion in debt, progress in reducing the size of rental fleet and other costs and a recovery in the used car market. However, despite those considerations, Moody’s says it doesn’t expect the weak demand for automobile and equipment rental to rebound until 2011. Because of this, the resulting revenue decline will weigh on the company’s ability to get credit.

Further, Moody’s downgraded the company’s liquidity rating to “SGL-3” from “SGL-2.” Moody’s attributes this change to the fact that Hertz will have to refinance around $4.2 billion in debt that supports its car rental fleet in the next year and a half.

For its part, Hertz has publicly announced a plan to refinance its maturing obligations. Moody said Hertz’s recent improvement in the market for unsecured debt and its ability to sell new stock and convertible notes in May are indications for the company to proceed with its plan. However, if there is a lack of progress with the new plan, it could contribute to a ratings downgrade.