S&P keeps Dollar Thrifty on positive watch

Standard & Poor's said that its ratings on Dollar Thrifty Automotive Group Inc. remain on CreditWatch with positive implications.

This follows competitor Hertz Global Holdings Inc.'s new bid to acquire Dollar Thrifty, the agency said. Hertz's previous bid was rejected by Dollar Thrifty's shareholders on Sept. 30, 2010 in favor of a higher bid made by competitor Avis Budget Group Inc.

In the proposed acquisition bids, Dollar Thrifty's corporate debt would be retired and either Hertz or Avis Budget would assume its $1.4 billion of fleet debt, the agency added. The acquisition would result in an increase in market share for either Avis Budget or Hertz in the U.S. on-airport sector.

The ratings reflect its aggressive financial profile and small market share and the price-competitive and cyclical nature of on-airport car rentals as well as the strong cash flow its business generates, even in periods of weak demand, the agency added.

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