Hertz 2009 Annual Report Download - page 141

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
increases. These swaptions gave HIL the right, but not the obligation, to enter into three year interest rate
swaps, based on a total notional amount of e600 million at an interest rate of 4.155%. The swaptions
were renewed twice in 2007, prior to their scheduled expiration dates of March 15, 2007 and
September 5, 2007, at a total cost of e2.7 million and were due to expire on June 5, 2008. On June 4,
2008, these swaptions were sold for a realized gain of e9.4 million (or $14.8 million). Additionally, on
June 4, 2008, HIL purchased two new swaptions for e8.6 million, to protect itself from interest rate
increases associated with the International ABS Fleet Financing Facility, which closed on July 24, 2008.
These swaptions were based on an underlying transaction with a notional amount of e600 million at an
interest rate of 4.25%. On October 10, 2008, the outstanding swaptions were terminated and Hertz
received a e1.9 million payment from counterparties. See Note 12—Financial Instruments.
On July 24, 2008, HIL, certain of its subsidiaries (all of which are organized outside the United States),
Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated
Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as
Joint Bookrunners, BNP Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as
Global Coordinator, and the financial institutions named therein, entered into an amendment agreement,
or the ‘‘Amendment Agreement,’’ amending the revolving bridge loan facilities agreement, dated
December 21, 2005 and amended as of March 21, 2007 and December 21, 2007 (as further amended by
the Amendment Agreement, or the ‘‘SBFA’’). The Amendment Agreement, which became effective on
July 24, 2008, was entered into primarily for the purpose of (i) amending certain terms affecting the
margins on the revolving bridge loan facilities established by the SBFA, and (ii) effecting certain
technical and administrative changes to the terms of the facilities in connection with the launch of the
International ABS Fleet Financing Facility described below.
For the year ended December 31, 2008, we recorded $30.0 million related to the write-off of deferred
financing costs associated with those countries outside the United States as to which take-out asset-
based facilities have not been entered into.
We are currently in discussions regarding our refinancing options, and based on these discussions and
our ability to access the capital markets we expect to refinance these facilities on or prior to maturity.
However, the availability of financing is subject to a variety of factors not in our control including
economic and market conditions and investor demand, so there is no guarantee that such facilities can
be refinanced or that the terms of such financings will be acceptable. In the event financing is not
available or is not available on terms we deem acceptable, we would expect to utilize our corporate
liquidity to repay these obligations which could reduce our ability to fund operations and replace our
fleet.
International ABS Fleet Financing Facility
On July 24, 2008, HIL and certain of its subsidiaries entered into an agreement to amend the
International Fleet Debt facility. This agreement, effective on July 24, 2008, reduced the borrowing
margins on the Tranche A1 and Tranche A2 bridge loans of certain borrowers under the facility
participating in the International ABS Fleet Financing Facility and provided an August 12, 2008 final
maturity date for loans to HIL’s Swiss subsidiary borrower. In August, we paid off the loan to HIL’s Swiss
subsidiary borrower and closed out the loan.
Also on July 24, 2008, HA Fleet Pty Ltd, RAC Finance SAS and Stuurgroep Fleet (Netherlands) B.V.,
special-purpose indirect subsidiaries of HIL, each a ‘‘FleetCo,’’ closed on the International ABS Fleet
Financing Facility, initially covering Australia, France and the Netherlands, respectively, or the ‘‘Relevant
Jurisdictions.’’
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