Hertz 2010 Annual Report Download - page 126

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Canadian Securitization
In May 2007, certain foreign subsidiaries entered into a credit agreement that provides for aggregate
maximum borrowings of CAD$225 million (the equivalent of $224.8 million as of December 31, 2010)
(subject to borrowing base availability) on a revolving basis under an asset-backed securitization facility
(as amended, the ‘‘Canadian Securitization’’). The Canadian Securitization is the primary fleet financing
for our rental car operations in Canada. The lenders under the Canadian Securitization have been
granted a security interest primarily in the owned rental car fleet used in our car rental operations in
Canada and certain contractual rights related to such vehicles.
Australian Securitization
In November 2010, certain foreign subsidiaries entered into a credit agreement that provides for
aggregate maximum borrowings of A$250 million (the equivalent of $254.5 million as of December 31,
2010) (subject to borrowing base availability) on a revolving basis under an asset-backed securitization
facility (the ‘‘Australian Securitization’’). The Australian Securitization is the primary fleet financing for our
rental car operations in Australia. The lenders under the Australian Securitization have been granted a
security interest primarily in the owned rental car fleet used in our car rental operations in Australia and
certain contractual rights related to such vehicles. In connection with the issuance of the Australian
Securitization, an interest rate cap was purchased by the foreign subsidiaries. Concurrently, Hertz sold
an offsetting interest rate cap, thereby neutralizing the hedge on a consolidated basis and reducing the
net cost of the hedge. See Note 13—Financial Instruments.
Brazilian Fleet Financing Facility
In December 2010, a foreign subsidiary amended its asset-based credit facility (as amended, the
‘‘Brazilian Fleet Financing Facility’’) which was the primary fleet financing for our rental car operations in
Brazil. In February 2011, we paid off the maturing amount of the Brazilian Fleet Financing Facility and the
collateral thereunder was released and the guaranty thereunder was terminated.
Capitalized Leases
References to the ‘‘Capitalized Leases’’ include the capitalized lease financings outstanding in the
United Kingdom (the ‘‘U.K. Leveraged Financing’’), Australia, The Netherlands and the United States.
The amount available under the U.K. Leveraged Financing, which is the largest portion of the Capitalized
Leases, increases over the term of the facility to £195.0 million (the equivalent of $302.3 million as of
December 31, 2010).
Restricted Net Assets
As a result of the contractual restrictions on Hertz’s or its subsidiaries’ ability to pay dividends to us
(directly or indirectly) under various terms of our debt, as of December 31, 2010, the restricted net assets
of our subsidiaries exceeded 25% of our total consolidated net assets.
Financial Covenant Compliance
As of December 31, 2010, we were in compliance with all financial covenants in our various debt
instruments. Based on our current projections, we believe that we will remain in compliance with our
corporate debt covenants over the next twelve months.
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