Hertz schedules Friday call to launch $1.95 billion bridge loan

By Sara Rosenberg

New York, Sept. 5 - Hertz Global Holdings Inc. will hold a conference call on Friday to launch its $1.95 billion 365-day unsecured bridge that backs the acquisition of Dollar Thrifty Automotive Group Inc., a market source told Prospect News.

Barclays, Bank of America Merrill Lynch and Deutsche Bank are the lead banks on the deal.

The loan, which is expected to be taken out with high-yield bonds and an incremental term loan, is priced at Libor plus 537.5 basis points with a 1% Libor floor, according to recent filings with the Securities and Exchange Commission. The spread will increase by 50 bps every three months until it hits a cap.

Proceeds will be used to help fund the acquisition of Dollar Thrifty for $87.50 per share. The transaction has an equity value of $2.6 billion and a corporate enterprise value of $2.3 billion.

Total debt to EBITDA will be 3.7 times, or 3.4 times with cost synergies, and total debt to gross EBITDA will be 4 times, or 3.8 times with cost synergies.

The combined company would have combined June 30 trailing-12-month sales of $10.2 billion and EBITDA of around $1.8 billion.

Closing is expected in mid-to-late October, subject to the tender of a majority of the shares of Dollar Thrifty common stock, regulatory clearance by the Federal Trade Commission and other customary conditions.

Hertz is a Park Ridge, N.J.-based auto and equipment rental company. Dollar Thrifty is a Tulsa, Okla.-based renter and leaser of vehicles.

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