S&P rates Hertz second-lien notes BB

S&P said it affirmed the B+ corporate credit rating on Hertz Global Holdings Inc. and its major operating subsidiary, Hertz Corp.

The outlook on both companies is stable.

S&P also said it assigned a BB rating and 1 recovery rating to Hertz's proposed $1 billion second-lien secured notes due 2022.

The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it lowered the rating on Hertz's unsecured notes to B- from B and revised the recovery rating on the notes to 6 from 5.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The agency also said it also raised the rating on Hertz Holdings Netherlands BV's unsecured euro notes to BB- from B and revised the recovery rating on the notes to 2 from 5.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The proceeds will be used from the proposed second-lien notes to repay its debt.

Over the last few years, Hertz has experienced multiple operating issues, many of which are specific to Hertz Global Holdings, S&P said.

These issues include the accounting restatements and corrections that concluded in July 2015 and the premium the company paid for Dollar Thrifty in 2012, which has led to impairment charges, the agency said.

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