Hertz 2009 Annual Report Download - page 139

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
material inaccuracy of representations or warranties, failure to maintain certain enhancement levels and
insolvency or certain bankruptcy events. The occurrence of an amortization event or event of default
could result in the rapid amortization of the Series 2009-1 Notes and in certain instances the liquidation
of vehicles in the U.S. car rental fleet. In connection with the issuance of the Series 2009-1 Notes, HVF
purchased a 5% interest rate cap. See Note 12—Financial Instruments.
Immediately prior to the issuance of the Series 2009-1 Notes, HVF caused the termination of the series
supplements and note purchase agreements relating to its Series 2005-3 Variable Funding Rental Car
Asset Backed Notes, or the ‘‘Series 2005-3 Notes,’’ Series 2005-4 Variable Funding Rental Car Asset
Backed Notes, or the ‘‘Series 2005-4 Notes,’’ and Series 2008-1 Variable Funding Rental Car Asset
Backed Notes, or the ‘‘Series 2008-1 Notes,’’ or the ‘‘Terminated VFNs,’’ and caused the repayment and
cancellation in full of the Terminated VFNs. The Terminated VFNs had expected final maturity dates
ranging from November 2009 to November 2010 and we had an aggregate of approximately $2.0 billion
of total capacity (prior to borrowing base or other limitations) under the Terminated VFNs. As of
December 31, 2009, no amounts were outstanding under the Series 2009-1 Notes.
Series 2009-2 Notes. In October 2009 HVF issued $1.2 billion in aggregate principal amount of
Series 2009-2 Notes. The 3 year notes carry a 4.26% coupon (4.30% yield) and the 5 year notes carry a
5.29% coupon (5.35% yield) with expected final maturities in 2013 and 2015, respectively. The advance
rate on the notes is approximately 66%. The Series 2009-2 Notes are currently rated ‘‘Aaa’’ by Moody’s.
The Series 2009-2 Notes are subject to events of default and amortization events that are customary in
nature for U.S. rental car asset-backed securitizations of this type, including non-payment of principal or
interest, violation of covenants, material inaccuracy of representations or warranties, failure to maintain
certain enhancement levels and insolvency or certain bankruptcy events. The occurrence of an
amortization event or event of default could result in the rapid amortization of the Series 2009-2 Notes
and in certain instances the liquidation of vehicles in the U.S. car rental fleet. As of December 31, 2009,
$1,186.7 million in borrowings were outstanding under the Series 2009-2 Notes, net of a $13.3 million
discount, with an average interest rate of 4.9%.
International Fleet Debt
In connection with the Acquisition, Hertz International, Ltd., or ‘‘HIL,’’ a Delaware corporation organized
as a foreign subsidiary holding company and a direct subsidiary of Hertz, and certain of its subsidiaries
(all of which are organized outside North America), together with certain bankruptcy-remote special
purpose entities (whether organized as HIL’s subsidiaries or as non-affiliated ‘‘orphan’’ companies), or
‘‘SPEs,’’ entered into revolving bridge loan facilities providing commitments to lend, in various
currencies an aggregate amount equivalent to approximately $1,565.7 million (calculated as of
December 31, 2009), subject to borrowing bases comprised of rental vehicles and related assets of
certain of HIL’s subsidiaries (all of which are organized outside North America) or one or more SPEs, as
the case may be, and rental equipment and related assets of certain of HIL’s subsidiaries organized
outside North America or one or more SPEs, as the case may be. As of the closing date of the
Acquisition, the foreign currency equivalent of $1,781 million of indebtedness under the International
Fleet Debt facilities was issued and outstanding under these facilities. As of December 31, 2009, the
foreign currency equivalent of $705.3 million in borrowings was outstanding under these facilities, net of
an $8.7 million discount. These facilities are referred to collectively as the ‘‘International Fleet Debt’’
facilities.
The International Fleet Debt facilities consist of four revolving loan tranches (Tranches A1, A2, B and C),
each subject to borrowing bases comprising the revenue earning equipment and related assets of each
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