S&P rates Hertz notes B-

Standard & Poor's said it assigned a B- rating to Hertz Corp.'s (B+/stable) $500 million senior notes due 2019 with a recovery rating of 6, indicating expectation of 0% to 10% recovery.

Proceeds will be used for general corporate purposes, including debt repayment.

On Dec. 20, the agency raised the ratings on Hertz Global Holdings Inc. and its major operating subsidiary Hertz Corp. to B+ from B and removed them from CreditWatch, where they were placed with positive implications on April 26, when Hertz announced it had signed a definitive agreement to acquire Dollar Thrifty Automotive Group Inc. On Sept. 30, Dollar Thrifty's shareholders voted against Hertz's bid.

The upgrade reflects Hertz's improved operating and financial performance, which is expected to be sustained, even without the acquisition of Dollar Thrifty, according to the agency.

The company's operating performance has benefited from stronger demand in both its car and equipment rental operations, higher prices on leisure car rentals and substantial cost reductions, S&P said.

Ratings reflect an aggressive financial profile and the price-competitive and cyclical nature of on-airport car and equipment rentals, the agency said.

Ratings also incorporate the company's position as the largest global car rental company and the strong cash flow its businesses generate, the agency noted.

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