S&P gives BB- to Hertz Holdings notes

S&P said it assigned its BB- issue-level rating and 2 recovery rating to Hertz Holdings Netherlands BV’s proposed €500 million senior unsecured notes due 2023.

The notes will also be guaranteed by Hertz Corp. The 2 recovery rating indicates an expectation that lenders would receive substantial recovery (70%-90%; rounded estimate: 85%) of their principal in the event of a payment default.

Hertz Holdings Netherlands BV and Hertz Corp. are subsidiaries of Hertz Global Holdings Inc.

“Our B+ corporate credit rating on Hertz reflects its position as one of the largest global car rental companies, and the cyclical and price-competitive nature of on-airport car rentals.

“Over the past few years, Hertz has experienced multiple operating issues, caused in large part by excess capacity and lower-than-expected residual values upon sale of its vehicles. This has resulted in weak credit metrics, which we don't expect to improve significantly over the next year,” S&P said in a news release.

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