Hertz 2008 Annual Report Download - page 161

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
associated with the write-off of debt costs in connection with the amendment of the Senior Term Facility.
Additionally, in February 2007, Hertz permanently repaid a portion of the Senior Term Facility, bringing
the maximum borrowings thereunder down from $2,000 million to $1,400 million.
On February 15, 2007, Hertz, Hertz Equipment Rental Corporation and certain other subsidiaries entered
into an amendment to its Senior ABL Facility. The amendment was entered into for the purpose of
(i) lowering the interest rates payable on the Senior ABL Facility by up to 25 basis points from the interest
rates previously payable thereunder, and revising financial ratio requirements for specific interest rate
levels; (ii) increasing the availability under the Senior ABL Facility from $1,600 million to $1,800 million;
(iii) extending the term of the commitments under the Senior ABL Facility to February 15, 2012;
(iv) increasing the amounts of certain other types of indebtedness that the borrowers and their
subsidiaries may incur outside of the Senior ABL Facility; (iv) permitting certain additional asset
dispositions and sale and leaseback transactions; and (v) effecting certain technical and administrative
changes to the Senior ABL Facility. During the year ended December 31, 2007, we recorded an expense
of $2.2 million in our consolidated statement of operations, in ‘‘Interest, net of interest income,’’
associated with the write-off of debt costs in connection with the amendment of the Senior ABL Facility.
On May 23, 2007, the Senior ABL Facility and the Senior Term Facility were each amended to permit
Hertz and its subsidiaries to guarantee obligations in respect to the deferred purchase price of vehicles
and all other obligations arising under vehicle supply agreements entered into by Fleetco (Espana), S.L.,
an entity created to own the Spanish rental car fleet in connection with the pending securitization of the
rental car fleets in a number of European countries and Australia. Due to Spanish law considerations,
Fleetco (Espana), S.L. is an ‘‘orphan’’ entity which is an indirect subsidiary of a charitable trust. The
Senior Credit Facilities generally permit Hertz and its subsidiaries to guarantee obligations of one
another but not of unaffiliated entities, subject to certain exceptions.
On September 30, 2007, the Senior ABL Facility was amended to add Hertz Canada Equipment Rental
Partnership, an Ontario General Partnership, as an additional Canadian Borrower. Hertz Canada
Equipment Rental Partnership, whose partners are our wholly-owned subsidiary, Matthews and its
wholly-owned subsidiary, was formed in connection with a reorganization of Matthews and, as part of
that reorganization, received title to most of the assets of Matthews.
Senior Notes and Senior Subordinated Notes
In connection with the Acquisition, CCMG Acquisition Corporation issued the Senior Notes and the
Senior Subordinated Notes under separate indentures between CCMG Acquisition Corporation and
Wells Fargo Bank, National Association, as trustee. Hertz and the guarantors entered into supplemental
indentures, dated as of the Closing Date, pursuant to which Hertz assumed the obligations of CCMG
Acquisition Corporation under the Senior Notes, the Senior Subordinated Notes and the respective
indentures, and the guarantors issued the related guarantees. CCMG Acquisition Corporation
subsequently merged with and into Hertz, with Hertz as the surviving entity.
As of December 31, 2008, $2,113.6 million and $600.0 million in borrowings were outstanding under the
Senior Notes and Senior Subordinated Notes, respectively. Prior to October 1, 2006, our Senior Euro
Notes were not designated as a net investment hedge of our Euro-denominated net investments in our
international operations. For the nine months ended September 30, 2006, we incurred unrealized
exchange transaction losses of $19.2 million resulting from the translation of these Euro-denominated
notes into the U.S. dollar, which are recorded in our consolidated statement of operations in ‘‘Selling,
general and administrative’’ expenses. On October 1, 2006, we designated our Senior Euro Notes as an
effective net investment hedge of our Euro-denominated net investment in our international operations.
As a result of this net investment hedge designation, as of December 31, 2008, $15.7 million of losses,
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