Hertz Global Holdings Inc.’s bonds were valued at 26.375 cents on the dollar in a credit derivatives auction yesterday, casting doubt on the possibility that shares will have any value when the company emerges from bankruptcy, Bloomberg News reported. The price, determined in an auction that’s used to settle hundreds of millions of credit default swaps tied to the bankrupt company, means traders who bought protection against the car rental company’s failure will be paid 73.625 cents for every dollar insured. The relatively low bond recovery level suggests Hertz shareholders are likely to see their holdings go to zero as the company reorganizes in bankruptcy court. Hertz is among several bankrupt and near-bankrupt companies whose shares have surged amid a burst of interest from retail investors, even though equity is typically wiped out in chapter 11 proceedings. Hertz shares at one point doubled early yesterday after analysts at Jefferies wrote that firms like CarMax Inc. and AutoNation Inc. could be interested in purchasing Hertz’s roughly 150,000-car inventory. The stock closed at $1.61, up 30 percent from a day earlier. In a highly unusual move, Hertz attempted to sell new shares last week to raise cash and help pay off creditors before calling off the effort amid scrutiny from the Securities and Exchange Commission.
