Hertz Corp. is tapping the asset-backed securities market this week with its first full-term rental-car securitization since November 2019, part of its emergence from chapter 11 protection, Bloomberg News reported. Proceeds from its inaugural post-bankruptcy ABS will be used to finance the purchase of new vehicles to be leased to Hertz under a so-called master lease agreement. It will also be used to refinance both its original pre-bankruptcy legacy fleet-financing facility, as well as a $4 billion interim facility established last November with Athene USA Corp., an affiliate of Apollo Capital Management Inc., as a stepping stone toward an ABS transaction. The total $2.2 billion offering, composed of two bond series, is expected to meet strong demand from investors who have a renewed confidence in the rental-car sector as travel picks up post-pandemic. The deal will likely satisfy yield-hungry investors, market observers say, as risk premiums at price talk are relatively wide compared to other recent rental-car ABS from issuers such as Avis Budget Group Inc.
