Hertz falls further after upsized $350 mln exchangeable offering

Barclays

Yesterday 12:21

** Rental car firm Hertz Global's HTZ.O shares down 6% in premarket trading on Thurs to $2.82 after capital raise
** HTZ earlier Thurs announced pricing private offering of $350 mln 6.75% exchangeable PIK notes due 2030
** It also announced public offering of ~37 mln shares at $2.70 for $100 mln; shares to be loaned to JP Morgan, one of the underwriters, to facilitate hedging transactions by investors in the exchangeable notes
** HTZ shares plunged ~41% to close at $3 on Weds after co unveiled $300 mln exchangeable and warned of hit to Q2 EBITDA due to sluggish used-car market
** Initial conversion price on exchangeable notes of $3.58 represents a 32.5% premium over the public share offering price of $2.70
** HTZ intends to use net proceeds from the notes offering for general corp purposes, including debt repayment
** At Weds close, HTZ shares have shed 59% over the past 12 months
** 6 analysts rate the stock "hold", the other 3 rate "sell"; median PT $5, per LSEG data

(Lance Tupper is a Reuters market analyst. The views expressed are his own)
((lance.tupper@tr.com 1-646-279-6380))