Hertz Secures Financial Stability with Landmark Credit Facility Overhaul

Hertz Global Holdings (HTZ) has taken a major step toward long-term financial resilience by finalizing amendments to its credit facilities, extending $4.5 billion in U.S. dollar-denominated commitments and €1.16 billion in European facilities. These moves, announced in May 2025, push key maturities to 2027–2028, providing critical breathing room to execute its transformation strategy.

The Amendments: Key Details and Strategic Impact

The amendments involve three primary facilities:

1. First Lien Revolving Credit Facility (RCF):
2. $1.665 billion of commitments were extended from a June 2026 maturity to March 2028.

3. Total RCF capacity remains at $2.0 billion until June 2026, after which it tapers to $1.665 billion.

4. HVF III U.S. Vehicle Variable Funding Notes:

5. Commitment termination date pushed to May 2027, with $3.64 billion available until April 2026, then stepping down to $2.86 billion.

6. European ABS Facility:

7. Maturity of €1.16 billion of Class A notes extended to April 2027, maintaining €1.289 billion in commitments until March 2026.

The combined extensions total over $5.7 billion USD equivalent, creating a financial runway that alleviates near-term refinancing pressures. CEO Gil West emphasized the amendments as a “testament to lender confidence in our strategic execution.”

Why This Matters for Investors

The restructuring addresses two critical pain points for Hertz: liquidity and capital flexibility.

• Reduced Refinancing Risk: By pushing maturities past 2026, Hertz avoids a liquidity cliff. As of December 2024, the company reported $1.8 billion in corporate liquidity, but its GAAP net loss of $2.9 billion for 2024 underscores the need for stability. The extended facilities buy time to improve profitability.
• Operational Focus: The staged reductions in commitments—such as the RCF shrinking from $2.0B to $1.665B—suggest Hertz plans to reduce fleet size or improve capital efficiency. This aligns with its goal to normalize depreciation per unit (DPU) below $300 by late 2025, a key metric for cost control.
• Lender Confidence: The willingness of lenders to extend terms signals trust in Hertz’s “back-to-basics” strategy, which prioritizes customer experience, fleet optimization, and disciplined capital allocation.

Risks and Challenges Remain

While the amendments are a positive step, Hertz still faces hurdles:
- High Leverage: The company carries significant debt, including $1.25 billion in 12.625% senior notes issued in late 2024.
- Depreciation Pressures: While DPU fell 16% year-over-year in Q4 2024, further declines depend on successful fleet rotations and residual value management.
- Market Volatility: The automotive sector remains exposed to supply chain disruptions, fuel costs, and macroeconomic shifts.

Conclusion: A Critical Milestone, but Challenges Linger

The May 2025 amendments mark a pivotal achievement for Hertz, extending its financial runway and reducing refinancing risks through 2028. The $4.5B+ in U.S. facilities and €1.16B in European commitments provide ample capital to fund fleet adjustments, cost-cutting initiatives, and operational improvements.

However, investors must remain cautious. Hertz’s net loss in 2024 and high leverage mean profitability remains a work in progress. Success hinges on executing its fleet rotation plan, stabilizing DPU below $300, and navigating macroeconomic headwinds.

For now, the credit facility overhauls are a clear win, buying time to turn strategy into sustained financial health. The question remains: Can Hertz capitalize on this stability to deliver the long-awaited turnaround?

Data as of May 2025. Past performance does not guarantee future results.