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Bond Market News
Hertz, Avis Bonds Rally on 25% Tariff Imposition
March 28, 2025
Shares and bonds of Hertz and Avis Budget Group surged, following US President Donald Trump’s proposal to impose a 25% tariff on imported vehicles. Some analysts suggest that the potential tariff hike may increase the price of new cars in the US, leading consumers to consider car rentals instead of purchasing expensive vehicles. As a result, Hertz and Avis’ shares jumped 20-23%, despite both companies losing nearly half of their value over the past year. JPMorgan analysts noted that auto parts and services companies could also benefit from the tariffs, as consumers may keep their cars longer, increasing the need for repairs. In contrast, car manufacturers like Ford and General Motors saw their stock prices fall 4-7% and their bonds ticked lower.
Hertz’s 4.625% 2026s were up 5.7 points to trade at 68.8 cents on the dollar. Avis’ 8.25% 2030s were up 1.4 points to trade at 96.8, yielding 9.1%.
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