Hertz notes decline after financing news; PetSmart lower following ratings actions

By James McCandless

San Antonio, Nov. 6 – Distressed debt trading focused on travel and retail names on Friday.

Hertz Global Holdings, Inc.’s notes dropped after the company announced that it had secured a $4 billion fleet financing commitment.

The 6¼% senior notes due 2022 sank 1¼ points to close at 38½ bid. The 5½% senior notes due 2024 shaved off ¾ point to close at 38½ bid.

Nearing the close on Thursday, the Estero, Fla.-based car rental service announced that it has secured commitments for fleet financing comprising $4 billion and has filed a motion for approval, Prospect News reported.

Following the approval, and together with the up to $1 billion of Hertz’s debtor-in-possession financing that may be used for equity in the fleet financing subsidiary, the company will have access to up to $5 billion in total funding to support its fleet financing needs.

“That’s the one thing they need,” a trader said. “Without the fleet they cannot generate cash.”

Meanwhile, in retail, PetSmart, Inc.’s issues shifted lower as the company saw the attention of two ratings agencies.

The 8 7/8% senior notes due 2025 lost ½ point to close at 101¼ bid. The 5 7/8% senior notes due 2025 weakened by ¾ point to close at 101¾ bid.

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