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Bond Market News
Hertz Planning to Raise Debt to Boost Liquidity; Bonds Rally
April 21, 2025
Hertz is seeking to raise debt to strengthen its balance sheet liquidity amid a potential $300mn bankruptcy payout to bondholders and other upcoming liabilities. The car rental company is working with Ducera Partners to secure new financing and extend the maturity of a revolving credit facility (RCF) due next year. These efforts began before hedge fund, Pershing Square Capital disclosed a 19.8% stake in Hertz, sending shares up 44% on Thursday. As per analysts, Pershing’s involvement has boosted investor confidence, potentially lowering Hertz’s borrowing costs. Emerging from bankruptcy in 2021, Hertz suffered a $2.9bn loss in 2023 after a failed investment in Tesla electric vehicles, which proved costly to maintain. Hertz has since sold 30,000 EVs and is working to resolve bankruptcy-era litigation. The company, has over $6bn in debt and is also collaborating with AlixPartners on its financial strategy. Its CFO Scott Haralson stated earlier this year, that Hertz expects its lowest liquidity mid-year but is confident in managing upcoming debt maturities. The company is said to plan moving collateral to protect assets from existing creditors while negotiating new terms.
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