Hertz Talks With Banks on Financing Options

As the travel industry has slumped amid the coronavirus pandemic, the car-rental icon is in talks with banks about financing options, including collateralizing its vehicle fleet, according to a report.
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Hertz Global  (HTZ) - Get Report is discussing financing options with banks as it looks to weather the slump in travel caused by the coronavirus pandemic, a media report says. 

Hertz has been in discussions with multiple banks, led by Barclays, on its options, which include a first-lien loan, second-lien financing or collateralizing its rental-vehicle fleet, according to a Bloomberg report. 

The company has also asked the U.S. Treasury Department for a loan, according to the report. 

At last check shares of the Estero, Fla., company were off 10% at $6.49. This as the wider market is lower on Friday after a three-day rally. 

No decisions have been made yet, according to Bloomberg's sources, but one option is a first-lien loan that could total several hundred million dollars at a yield of about 12%. 

“Like the rest of the global travel sector, Covid-19’s impact on Hertz arrived swiftly, and the reversal in customer demand has been significant,” Chief Executive Kathryn Marinello said in a statement late Thursday. 

“We are aggressively taking actions to sustain operations and preserve liquidity, while confronting the issues raised by some of the most difficult economic conditions we have experienced.”

Hertz shares are down more than 60% since it reached its 52-week high, $20.85, on Feb. 20. 

The company had $17 billion in debt as of the end of 2019, compared with a market capitalization of $1 billion, Bloomberg reported.