Hertz Repricing Gets Pulled

Deutsche Bank pulled its repricing for Hertz Corp. after investors balked at the refinancing when they learned that the company's private equity owners filed an 8K saying they would take up to a $1 billion dividend.

  • 30 Jun 2006
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Deutsche Bank pulled its repricing for Hertz Corp. after investors balked at the refinancing when they learned that the company's private equity owners filed an 8K saying they would take up to a $1 billion dividend. As first reported on Credit Investment News' Web site Thursday morning, Deutsche Bank pulled the repricing portion of the amendment, but is expected to still ask for the technical amendment, which will make restricted payment language consistent between the loan and bond indenture.

The company had been asking for a 25 basis points cut to LIBOR plus 2% on the approximately $2.25 billion facility. Commitments were due last Wednesday. A Deutsche Bank banker declined comment.

"I think people felt like they were bait and switched over the dividend issue," said one portfolio manager. "Taking out a dividend, trying to reduce pricing and in an industry that is a little tricky, auto related, add those three things together..."

On June 23, Hertz filed an 8K with the Securities and Exchange Commission saying it had received commitments from Deutsche Bank, Lehman Brothers, Merrill Lynch, Goldman Sachs, JPMorgan and Morgan Stanley for up to $1 billion to pay a dividend. It comes just six months after The Carlyle Group, Clayton Dubilier & Rice and Merrill Lynch Global Private Equity bought Hertz from Ford Motor Co. Deutsche Bank, Lehman Brothers, Merrill Lynch, JPMorgan and Goldman Sachs provided the financing for the acquisition.

After the group filed the 8K, Standard & Poor's placed Hertz's ratings on CreditWatch with negative implications. Moody's Investors Service affirmed the corporate family rating at Ba3 and changed the rating outlook to negative from stable.

Calls to Paul Siracusa, cfo of Hertz, were not returned. A spokesman from Clayton, Dubilier & Rice declined comment. A Carlyle spokesman referred calls to a spokesman at Hertz, who did not return calls. Calls to a spokeswoman at Merrill Lynch were not returned.

  • 30 Jun 2006

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

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1 HSBC 27,039.93 106 7.36%
2 Deutsche Bank 25,125.19 81 6.84%
3 Bank of America Merrill Lynch 23,128.33 61 6.29%
4 BNP Paribas 19,315.94 110 5.26%
5 Credit Agricole CIB 18,706.93 106 5.09%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 13,488.13 59 8.47%
2 Citi 11,496.21 73 7.22%
3 UBS 11,302.86 45 7.09%
4 Morgan Stanley 10,864.95 59 6.82%
5 Goldman Sachs 10,434.21 54 6.55%