Hertz Refinances Debt
Hertz plans $100M stock offering and $300M notes for capital structure optimization.
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Key Points
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The stock offering includes a share-lending arrangement where JP Morgan Securities LLC (and/or its affiliates) will borrow Hertz's common stock and may sell those Borrowed Shares to support investors hedging their notes; Hertz and Hertz Corp. do not receive proceeds from the Borrowed Shares offering, but the borrower will pay Hertz a nominal lending fee for the use of the shares.
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The offering of the Borrowed Shares is linked to the private placement of Exchangeable Senior First-Lien Secured PIK Notes due 2030, with the notes offering potentially encouraging hedging activity via the short position created by the borrowed stock.
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The notes offering includes an upsizing option: initial purchasers may buy up to an additional $45 million of Exchangeable Senior First-Lien Secured PIK Notes due 2030, with settlement rights extending for up to 13 days from the issue date for those purchases.
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The Notes themselves are Exchangeable Senior First-Lien Secured PIK Notes due 2030 issued to qualified institutional buyers under Rule 144A, bearing interest with portions paid in cash and portions paid as PIK, and are exchangeable into cash or Hertz common stock under the indenture.
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There is conflicting contingency language across sources: Market News Desk states the stock offering is contingent upon the closing of Hertz Corp.'s private Notes offering, whereas another report indicates the Notes offering is not contingent on the closing of the stock offering (the notes' timing depends on market conditions).
Hertz Global Holdings sent its stock into freefall on June 24, 2026, after announcing a $100 million common stock offering and a $300 million private debt deal on the same morning. Shares fell as much as 24% in early trading, dropping to around $5.06 — well below their 52-week high of $8.44, according to GuruFocus.
The twin financing moves came alongside a steep cut to Hertz's Q2 2026 earnings forecast. The company now expects quarterly EBITDA of just $50 million to $80 million, a sharp drop driven by a used car market that turned soft in May, per Investing.com.
How the Share-Lending Deal Actually Works
The $100 million stock offering is not a typical share sale. Hertz loans its shares to J.P. Morgan Securities LLC. J.P. Morgan then sells those "Borrowed Shares" to the public. Hertz itself receives none of those proceeds — only a small, nominal lending fee, according to StreetInsider.
The purpose is to let buyers of Hertz's new debt hedge their bets. When noteholders buy the exchangeable bonds, they can use the borrowed shares to create a short position that offsets their risk. StockTitan notes the stock offering is contingent on the notes deal closing — but not the other way around. The debt raise is the priority.
The $300 Million Debt Deal and Its PIK Structure
Hertz's operating subsidiary, The Hertz Corporation, is offering $300 million in Exchangeable Senior First-Lien Secured PIK Notes due July 1, 2030. Initial purchasers can buy up to $45 million more, with settlement rights extending 13 days from the issue date. The notes are sold only to qualified institutional buyers under Rule 144A, per GuruFocus.
"PIK" stands for Payment-in-Kind. It means Hertz can pay part of its interest not in cash, but by issuing more debt. Interest payments begin January 1, 2027. Noteholders can eventually exchange their bonds for cash or Hertz common stock. Proceeds are earmarked for general corporate use, which may include paying down existing debt, according to Financial Content.
A Balance Sheet Still Scarred by the EV Bet
This financing is the latest chapter in Hertz's struggle to recover from a disastrous electric vehicle pivot. Under former CEO Stephen Scherr, Hertz bought tens of thousands of Teslas. When Tesla slashed prices in 2023, the resale value of Hertz's fleet collapsed, triggering massive losses. As of June 2026, Hertz carries $20.6 billion in total debt against a market cap of just $1.6 billion, per Investing.com.
Net depreciation per vehicle per month is now expected to hit $300 — higher than prior estimates — as used car prices stay soft. Jefferies holds a "Hold" rating with a $6 price target. Deutsche Bank also rates it "Hold," saying Hertz must cut direct operating costs sharply to hit its $1 billion EBITDA goal by 2027, according to Investing.com.
Hertz Frames This as a Turnaround, Not a Rescue
CEO Gil West, who took over on April 1, 2024, has pushed a "Back-to-Basics" strategy. He said Hertz is "turning our fleet into a business advantage." The company insists rental days and revenue per day are meeting expectations. It is also launching "Oro Mobility," a new unit focused on autonomous vehicle fleet management and ride-share services.
But critics see the share-lending deal differently. The arrangement creates built-in downward pressure on the stock, as noteholders short shares to hedge. The exchangeable notes are capped at converting into 19.9% of outstanding common stock — unless shareholders vote to allow more. StreetInsider reports this cap limits immediate dilution but signals potential future share issuance if the company's fortunes do not improve.
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