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Bond Market News
Knighthead & Certares Sweeten Offer for Hertz, Again
May 4, 2021
Car rental company Hertz saw investment firms Knighthead Capital Management and Certares Management submit another sweetened offer yet again to buy them out of bankruptcy. Under this deal, equity holders could recover $2.25 a share and sources say that bondholders would be paid in full while shareholders can get a bigger portion of the restructured company. As per sources, existing shareholders would receive 50 cents a share and a chance to participate in either a boosted $1.3bn rights issue or warrants for up to 10% of the reorganized company. This is the third bid Hertz has received from Knighthead and Ceratres after the investment companies sweetened the deal for a second time last month by offering shareholders a 40% stake in the restructured company via both direct investment and over $1bn via an equity rights issue. Hertz will evaluate this against existing reorganization sponsor Centerbridge Partners that proposed a swap of unsecured funded debt claims for 48.2% equity in the restructured company and the right to purchase additional $1.6bn in equity.
Hertz’s shares jumped 42.5% to $3.22 while its bonds were only marginally higher – its 5.5% 2024s, callable in a week at 102.8, were up 0.5 to 106.
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