HERTZ GLOBAL HOLDINGS, INC 8-K

What Happened

• Hertz Global Holdings, Inc. (through subsidiary The Hertz Corporation) announced on June 29, 2026 the issuance of $350,000,000 aggregate principal of 6.75% Exchangeable Senior First‑Lien Secured PIK Notes due 2030 (the “Exchangeable Notes”), with an underwriters’ option to purchase an additional $50,000,000 within 13 days. Interest is 6.75% per year, paid semi‑annually starting Jan 1, 2027, split into 3.375% paid in cash and 3.375% paid in PIK (payment‑in‑kind). The notes are exchangeable into Hertz common stock (or cash/combination at Hertz’s election) at an initial exchange rate equal to 279.5248 shares per $1,000 principal (≈ $3.58 per share).
• Separately, on June 24, 2026 Hertz entered an underwriting agreement for the public sale of 37,037,037 shares of common stock at $2.70 per share. Those “Borrowed Shares” were loaned to an underwriter (J.P. Morgan Securities LLC) under a share‑lending agreement; the loaned shares remain issued and outstanding for voting and dividend purposes while on loan.

Key Details

• Amount: $350,000,000 principal in Exchangeable Notes; $50,000,000 overallotment option (up to $400M total if exercised).
• Interest and maturity: 6.75% annual interest (3.375% cash + 3.375% PIK), semi‑annual payments, maturity July 1, 2030.
• Exchange terms: initial exchange price ≈ $3.58/share (279.5248 shares per $1,000); exchange share cap of 63,457,320 shares (subject to adjustment). Initial exchange price is ~32.5% premium to the $2.70 public offering price of the Borrowed Shares.
• Security & ranking: Notes are senior, first‑lien secured obligations of Hertz Corp., guaranteed by the parent (senior unsecured) and certain subsidiaries (first‑lien secured). Notes contain high‑yield covenants and customary events of default.
• Borrowed shares: 37,037,037 shares sold at $2.70; loaned shares remain outstanding for voting/dividend purposes; borrower must post collateral equal to market value of shares; loan terminates on specified events (including Oct 1, 2030 or certain post‑note events).

Why It Matters

• Financing and capital structure: The transaction raises immediate capital (potentially up to $400M) and creates a new senior, first‑lien secured obligation at Hertz Corp., which affects creditor priority and the company’s indebtedness profile.
• Potential equity impact: The Exchangeable Notes can be converted into common stock (or settled in cash), with an initial exchange price implying material potential dilution (exchange cap ≈63.5M shares). The Borrowed Shares transaction also increases shares outstanding while on loan and gives the borrower voting rights.
• Investor considerations: Retail investors should note the mix of cash and PIK interest (reduces near‑term cash interest burden), the secured nature of the notes, the conversion mechanics and caps, and related covenants and redemption/repurchase rights (including repurchase on certain “fundamental change” events). These facts affect both credit risk and potential equity dilution; review the full indenture and share‑lending agreement for details.