DBRS Confirms Hertz at BB, Revises Trend to Stable Following Acquisition Announcement

DBRS has today confirmed the ratings of Hertz Corporation (Hertz or the Company), including its Issuer Rating of BB. Concurrently, the trend has been revised to Stable from Positive. This rating action follows Hertz’s announcement that the Company has terminated its agreement to acquire Dollar Thrifty Automotive Group, Inc. (DTAG). The former positive trend, which was assigned on April 28, 2010, reflected DBRS’s view that the now-terminated DTAG transaction would have had a positive and immediate impact on Hertz’s overall solid franchise.

In revising the trend to Stable, DBRS is merely removing the shorter term ratings impact that was expected to be gained through the completion of the transaction. Importantly, the revision of the trend does not reflect any expected changes to the Company’s solid underlying earnings momentum. Over the near term, DBRS will monitor Hertz’s operating performance, looking for ongoing positive momentum in the franchise as well as in the financial performance.

The rating confirmation reflects the Hertz’s strong business franchise and solid market position in the daily vehicle rental business, the improving financial performance, and solid fleet management. Further, the rating confirmation considers the improving industry fundamentals, which include increasing rental demand and volumes, solid pricing, and improved market-wide access to funding.

Note:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Finance Companies Operating in the United States, which can be found on our website under methodologies.