COURT: Hertz judge approves USD 1.65bn DIP to fund debtor through 2021 - Debtwire

COURT: Hertz judge approves USD 1.65bn DIP to fund debtor through 2021

29 October 2020 - 12:00 am

Hertz’s bankruptcy judge today approved the company’s motion to use USD 1.65bn in debtor-in-possession (DIP) financing that the company says will allow it to operate through 2021.


The rental car giant announced earlier this month that it had secured a USD 1.65m DIP from various lenders with Barclays Bank as agent. The financing does not rollup any prepetition debt and consensually primes the company’s existing debt. Under the financing, the company will have the right to use at least USD 800m for working capital and general corporate purposes and up to USD 1bn to purchase new or used cars. The DIP, set to mature on 31 December 2021, requires the company to file a Chapter 11 plan by 31 August, but debtor counsel said today that the company hopes to exit “far in advance” of 2021.


“This will provide sufficient liquidity to comfortably operate the business through the end of 2021, which we hope is much longer than we need to complete these Chapter 11 cases,” debtor counsel Thomas Lauria, of White & Case, said at today’s hearing.


The unsecured creditors committee (UCC) and an ad hoc group of bondholders had filed limited objections to the financing, but the company resolved those issues before today’s hearing and will file an amended order reflecting those changes.


With all potential roadblocks removed, Judge Mary Walrath of the US Bankruptcy Court for the District of Delaware approved the financing.




Hertz filed for Chapter 11 in May in freefall after the coronavirus pandemic wreaked havoc on the travel industry. The company’s revolver is currently quoted at 93.4/95.4, according to Markit. On the unsecured side, Hertz’s USD 500m 6.25% traded this morning at 40.1, down from 46 a month ago.