HomeIndustriesRental Car Giant Hertz is Looking to Raise $750 Million Through Junk...

Rental Car Giant Hertz is Looking to Raise $750 Million Through Junk Bond Offering

Rental car giant Hertz Global Holding hopes to raise $750 million in an upcoming junk bond offering as the company looks to boost its balance sheet. The move is closely tied to Hertz’s recent electric cars fiasco.

Hertz announced on Thursday that it plans to offer first-lien secured notes worth $500 and second-lien exchangeable notes worth $250 million. Both notes will mature in 2029.

The company said in a statement that it intends to use the funds it collects through junk bond offerings “to pay down a portion of its $2.0 billion committed revolving credit facility, improving liquidity.”

Back in October 2021, Hertz announced it plans to buy 100,000 electric cars from Tesla and 240,000 EVs from other electric car makers in an effort to revamp its fleet. However, the company only bought 60,000 EVs before deciding to pull the plug on the plan.

The EVs proved unexpectedly less popular with customers, while the damage rates were twice as high as with traditional cars. Hertz later tried to recoup some of its money by selling 20,000 of the EVs it owned, but a loss in value caused the company to take a $245 million earnings hit in the recent quarter.

Shares of Hertz plunged on Thursday, coming down to $3.01 per share at one point. The company’s stock is 70.49% down year-to-date.  

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