Hertz Global Holdings Inc. (HTZ), the largest publicly traded U.S. auto-rental chain, is seeking to reduce the rate it pays on a $1.38 billion term loan it obtained in 2011, according to a person with knowledge of the matter.
The company is proposing to pay interest at 2.25 percentage points to 2.5 percentage points more than the London interbank offered rate with a 0.75 percent minimum on the lending benchmark, said the person who asked not to be identified because the deal is private.
Lenders are offered 101 soft-call protection for six months, the person said, meaning that Park Ridge, New Jersey- based Hertz would have to pay a one-cent premium to reprice the debt in the first six months.
Deutsche Bank AG is leading the transaction, which will be offered at par to lenders, the person said.
The existing debt, due in March 2018, currently pays 2.75 percentage points more than Libor with a 1 percent minimum on the lending benchmark, Bloomberg data show. It fell to 100.4 cents on the dollar today, from 101.06 cents yesterday, according to prices compiled by Bloomberg.
“We’ve pretty much refinanced all our corporate debt within the last several years, so that we have a very favorable maturity profile,” Elyse Douglas, chief financial officer said at the Bank of America Corp. New York Auto Summit today. “We really don’t have any significant corporate maturities until 2018.”
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