Hertz 2009 Annual Report Download - page 134

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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.
On March 31, 2009, Hertz entered into an amendment, or the ‘‘Term Loan Amendment,’’ to the Senior
Term Facility. The Term Loan Amendment provides, in material part, that Hertz may make voluntary
prepayments of the term loans under the credit agreement that governs the Senior Term Facility, or the
‘‘Credit Agreement,’’ at a discount to their principal amount on up to four occasions for a period of one
year after the date of the Term Loan Amendment. The aggregate par principal amount of all such term
loans so prepaid may not exceed $500.0 million. The discount applicable to any such prepayments will
be determined through modified ‘‘Dutch auction’’ procedures and subject to the other terms and
conditions described in the Term Loan Amendment. Hertz may make any such prepayment only if it’s
unrestricted cash and cash equivalents plus available commitments under Hertz’s senior asset-based
loan facility equal or exceed $1.0 billion after giving effect to such prepayment. The Term Loan
Amendment does not obligate Hertz to make any such prepayments. The Term Loan Amendment also
makes certain technical and conforming changes to the terms of the Credit Agreement, including
changes to clarify the manner in which Consolidated Vehicle Interest Expense (as defined in the Credit
Agreement) is reflected in the calculation of Excess Cash Flow, which is at times used to determine
Hertz’s capacity to engage in certain transactions.
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.
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