COURT: Hertz moves to enter USD 4bn ABS facility for 2021 vehicle acquisitions - Debtwire

COURT: Hertz moves to enter USD 4bn ABS facility for 2021 vehicle acquisitions

05 November 2020 - 12:00 am

Hertz has filed a motion to enter into a USD 4bn asset-backed securitization (ABS) junior financing facility to purchase vehicles in 2021.


Through the financing, with Apollo Capital Management, Hertz would create Hertz Vehicle Interim Financing LLC, a non-debtor remote special purpose entity. The company notes that it is not asking the court to transfer or grant liens on any bankruptcy estate assets, but only to allow the company to perform under “certain ancillary transaction documents,” deeming an ABS facility the “most efficient and cost effective” way to finance the purchase of new and used rental vehicles in 2021.


Judge Mary Walrath of the US Bankruptcy Court for the District of Delaware has scheduled a 24 November hearing to consider the motion. Last week the judge signed off on USD 1.65bn in debtor-in-possession (DIP) financing that the company said will fund its operations through 2021, with plans to exit “far in advance” of 2022.


Prior to its bankruptcy filing, Hertz financed fleet purchases through another ABS facility with Hertz Vehicle Financing II LP. Over the last three months, the company contacted 38 potential lenders, obtained 11 proposals and had “lengthy and vigorous arms’ length negotiations” with four parties before selecting the Apollo financing.




Hertz filed for Chapter 11 in May in freefall as the coronavirus pandemic halted or slowed travel worldwide. The company’s revolver is currently quoted at 93.2/95, according to Markit. On the unsecured side, the company’s USD 500m 6.25% notes last traded on 4 November at 39, down from 42.75 a month ago, according to MarketAxess.


by Pat Holohan