Hertz Global Holdings unveiled a $400 million capital-raising strategy, encompassing a $100 million common stock offering and a $300 million private placement of exchangeable senior PIK notes due 2030. The company's announcement, made on June 24, 2026, also included a revised second-quarter Adjusted Corporate EBITDA forecast, now projected between $50 million and $80 million. This financial news, coupled with a warning about an "unexpected" softening in the used-car market that led to losses on vehicle sales in May, caused Hertz's shares to plunge more than 20% in pre-market trading.
The $100 million common stock offering is structured as a share-lending arrangement with J.P. Morgan Securities LLC. Hertz will lend shares to J.P. Morgan, which will act as the share borrower and underwriter. J.P. Morgan or its affiliates will receive all proceeds from the sale of these borrowed shares, while Hertz will only receive a nominal lending fee. The share borrower intends to sell these shares to facilitate hedging transactions for investors in the separate private offering of notes. This stock offering is contingent upon the closing of the notes offering.
Separately, Hertz's wholly-owned indirect subsidiary, The Hertz Corporation, plans to offer $300 million in Exchangeable Senior First-Lien Secured PIK Notes due 2030 in a private placement to qualified institutional buyers. There is also an option for initial purchasers to buy up to an additional $45 million in notes. The net proceeds from the notes offering are intended for general corporate purposes, which may include repaying outstanding debt. These notes will bear semiannual cash and PIK interest and will be exchangeable into cash, Hertz common stock, or a combination, with limits on stock issuance.
The company highlighted that losses on vehicle sales in May offset gains made in April, pushing the expected net depreciation per unit per month for the second quarter to approximately $300. Despite these challenges in the resale market, Hertz anticipates its core operating metrics, such as fleet size, revenue, revenue per day, and rental days, to meet or slightly exceed previous estimates. The negative news regarding the used-car market and the dilutive financing strategy prompted the sharp decline in Hertz's stock price.
