Hertz - Hertz as a Bankruptcy Risk ?

http://finance.yahoo.com/tech-ticker/article/336235/Ten-Big-Companies-That-Are-Veering-Toward-Bankruptcy?tickers=AMD,LVS,S,M,GT,MYL,HTZ

1. Hertz

When you have tons of debt financing your fleet of cars, falling rental demand really hurts.


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Not sure if this article is valid or not

Hertz really fell down when Ford sold it off.We now get lousy CS,old cars and high rates.
The high rates/old cars are also a result of the low demand/price for used cars=bad time to be holding paper on a bunch of used cars.

How is the vehicle financing situation of Hertz different from Avis/Budget and Enterprise/Alamo/National? All used to enjoy GM/F/Chrysler program cars with a guaranteed return value - now they buy more cars outright.

We had to go to the Gold counter for our last 4 or 5 rentals even with confirmations. The last rental had not been cleaned as we found over a few dollars in change and someone's binoculars in the case. Definitely a degradation in the quality of service at the counter and in servicing the vehicles. The binos are being mailed back along with a letter about our past experiences.

The article should list "All rental car companies" rather than just Hertz. Hertz was actually among the better rental companies when things were at their worst. Last winter Avis was the big question mark and their stock fell to 40-50 cents at one point in time.

Bankruptcy risk is almost nil. Hertz's business has been picking up in the past few months. They have been raising rates and are in the gradual process of bringing down the average age of their car fleet. Since May, they have increased their purchase of new vehicles. I got this info from the last time Hertz's CEO was on Fast Money.

Used car prices have also gone up in the past few months as the cash for clunkers program removed a lot of old vehicles from the market. Lower auto inventories have also helped to firm up used car prices.

If you don't believe what I wrote, you can look up HTZ, Hertz's stock ticker. The stock is trading near a 52 week high, and they just refinanced $2.14 billion in debt this past Monday. They were expecting to refinance $1.5 billion and took advantage of an oversubscription in the debt offering.