S&P rates Hertz notes B

S&P said it assigned a B rating and 5 recovery rating to Hertz Holdings Netherlands BV's senior notes due 2022.

The notes will be guaranteed by Hertz Corp.

The 5 recovery rating indicates 10% to 30% expected default recovery.

Hertz Holdings Netherlands and Hertz Corp. are subsidiaries of Hertz Global Holdings Inc., S&P explained.

The ratings consider the company’s position as one of the largest global car rental companies, the agency said, and the cyclical and price-competitive nature of on-airport car rentals.

The ratings also reflect the significant debt leverage and substantial ongoing fleet-funding needs of the company due to its capital-intensive operations, S&P said.

These risks are partly offset by Hertz's ability to significantly reduce capital spending if demand declines and its ability to generate strong cash flow, the agency said.

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