S&P: Hertz on watch

Standard & Poor's said it placed its ratings on Hertz Global Holdings Inc. and its major operating subsidiary, Hertz Corp., on CreditWatch with negative implications.

The agency said it based these actions on the company's announcement that it had entered into a definitive agreement to acquire competitor Dollar Thrifty Automotive Group Inc. for $2.6 billion of cash and assume Dollar Thrifty's debt.

"We will evaluate Hertz's business risk and financial risk profiles, pro forma for the Dollar Thrifty acquisition, to resolve the CreditWatch," said S&P credit analyst Betsy Snyder in a news release.

"We believe a downgrade, if any, would be limited to one notch. Alternatively, we could affirm the ratings if we believe the post-merger increase in earnings and cash flow more than offsets the incremental debt."

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