Hertz Global Holdings is launching a $300 million offering of exchangeable senior secured notes. The company also proposed a $100 million common stock offering. This stock offering is a share lending arrangement to facilitate hedging for note investors. Hertz will not receive any proceeds from the stock sale. Note proceeds will fund general corporate purposes and potential debt repayment.
The company expects second-quarter Adjusted Corporate EBITDA at the low end of its $50 million to $80 million range. Unexpected softness in the used car market caused this weaker outlook. High vehicle depreciation costs continue to impact the company's financial performance.
Hertz shares fell as much as 24% in pre-market trading following the announcement. Investors expressed concerns regarding the company's financial health and potential share dilution.