Hertz sets structure, talk on $2.8 billion equivalent three-part bond offering

By Paul A. Harris

St. Louis, Dec. 12 - Hertz Corp. issued price talk Monday on about $2.8 billion of high-yield bonds in three tranches, according to market sources.

The offering is expected to price Thursday.

The Park Ridge, N.J., vehicle-rental company talked $1.95 billion of eight-year senior notes (B1/B/BB-) at the 9% area. Meanwhile its €225 million tranche of eight-year senior notes (also B1/B/BB-) is talked at the 8% area.

The company is also in the market with $600 million of 10-year senior subordinated notes (B3/B/B+), which are talked at the 10¾% area.

Deutsche Bank Securities, Lehman Brothers, JP Morgan, Goldman Sachs & Co. and Merrill Lynch & Co. are joint bookrunners. BNP Paribas, The Royal Bank of Scotland and Calyon Securities are joint lead managers.

Proceeds will be used to help fund the $15 billion leverage buyout of the company by Clayton, Dubilier & Rice Inc., The Carlyle Group and Merrill Lynch Global Private Equity from Ford Motor Co.

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