By Paul A. Harris
Portland, Ore., Nov. 17 – Hertz Corp. priced $1.5 billion of senior notes (Caa1/B) in two tranches in a Wednesday drive-by, according to market sources.
The deal saw $250 million shifted to the longer-maturity eight-year notes from the five-year notes.
The execution saw a downsized $500 million of five-year notes price at par to yield 4 5/8%, tight to yield talk in the 4¾% area. Initial guidance was in the 5% area. The tranche size decreased from $750 million.
An upsized $1 billion tranche of eight-year notes priced at par to yield 5%, at the tight end of the 5% to 5¼% yield talk. Initial guidance was in the mid-5% area. The tranche size increased from $750 million.
The deal was heard to be playing to $5 billion of orders across both tranches.
The Hertz 4 5/8% notes due 2026 were par ¾ bid, 101½ offered, late Wednesday, a trader said.
The 5% notes due 2029, which saw the big upsize, were 101 bid, 101¾% offered, the source added.
Left bookrunner Barclays will bill and deliver. Joint bookrunners were J.P. Morgan Securities LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., Citizens Capital Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., RBC Capital Markets LLC, Credit Agricole CIB, Natixis Securities Americas LLC and BofA Securities Inc.
The Estero, Fla.-based car rental company plans to use part of the proceeds to fund a tender offer for its preferred equity securities, with up to $250 million of the proceeds to fund general corporate purposes. Proceeds in excess of $250 million remaining from the tender will be subject to mandatory redemption at par plus accrued interest.
| Issuer: | Hertz Corp.
|
| Amount: | $1.5 billion
|
| Securities: | Senior notes
|
| Left bookrunner: | Barclays (bill and deliver)
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| Joint bookrunners: | J.P. Morgan Securities LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., Citizens Capital Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., RBC Capital Markets LLC, Credit Agricole CIB, Natixis Securities Americas LLC and BofA Securities Inc.
|
| Trade date: | Nov. 17
|
| Settlement date: | Nov. 23
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| Ratings: | Moody's: Caa1
|
| S&P: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Drive-by
|
|
|
| Five-year notes
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| Amount: | $500 million, downsized from $750 million
|
| Maturity: | Dec. 1, 2026
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| Coupon: | 4 5/8%
|
| Price: | Par
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| Yield: | 4 5/8%
|
| Spread: | 340 bps
|
| Call protection: | Two years
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| Price talk: | 4¾% area
|
|
|
| Eight-year notes
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| Amount: | $1 billion, increased from $750 million
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| Maturity: | Dec. 1, 2029
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| Coupon: | 5%
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| Price: | Par
|
| Yield: | 5%
|
| Spread: | 351 bps
|
| Call protection: | Three years
|
| Price talk: | 5% to 5¼%
|
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