Hertz Falls as Analyst Says Revoked Bond Deal Risks Default
- Canceled redemption may have violated covenants, Xtract says
- Hertz credit default swap prices surge to highest since 2009
A row of rental cars are parked below a sign for Hertz Corp. at Denver International Airport.
Photographer: Matthew Staver/BloombergThis article is for subscribers only.
Hertz Global Holdings Inc. shares plunged after an analyst report suggested the troubled rental-car company may have risked defaulting on its debt by canceling plans to redeem bonds in July.
The stock fell as much as 11 percent after Xtract Research analyst Valerie Potenza wrote in a report that Hertz’s reneged plan to refinance as much as $450 million in bonds may have violated covenants. The move could constitute a default on debt maturing in 2019 because the company told investors it planned to redeem those notes, she wrote. Karen Drake, a Hertz spokeswoman, declined to comment.