Hertz vehicle rental has filed for bankruptcy protection amid COVID-19

A Hertz car rental is closed during the coronavirus pandemic in Paramus New Jersey

A Hertz car rental is closed during the coronavirus pandemic in Paramus New Jersey

Hertz filed for bankruptcy protection Friday, unable to withstand the coronavirus pandemic that has crippled global travel and with it, the heavily indebted 102-year-old auto rental company's business.

Automotive News reported Hertz had until Friday to make $400 million in lease payments.

Hertz's bankruptcy protection filing was hardly a surprise.

The firm, whose largest shareholder is the billionaire investor Carl Icahn, is reeling from government orders restricting travel.

Hertz also has traditional credit lines, loans and bonds with conditions that can trigger defaults based on missing those lease payments or failing to meet other conditions, such as delivering a timely operating budget and reimbursing funds it has borrowed.

Shares of Hertz stock were down 7.4919% as of 10:56 a.m. EDT on Friday. The Chapter 11 proceedings only involve the USA and Canadian subsidiaries.

A Hertz car rental is closed during the coronavirus pandemic in Paramus New Jersey
A Hertz car rental is closed during the coronavirus pandemic in Paramus New Jersey

Company officials added then that "there can be no assurances that Hertz will be able to successfully negotiate any further forbearance or waivers extending relief past May 22", meaning it might have to either liquidate vehicles serving as collateral or explore bankruptcy options. Back in April, lenders were more willing to be lenient to avoid selling the vehicles backing the ABS into a deeply depressed market.

The company usually soldier on through demand slump by selling a part of its fleet but with the volatile prices in the used vehicle market, that strategy isn't helping at all.

Still, any liquidation scenario does pose a risk to bondholders.

© Bloomberg Signage is displayed outside a Hertz Global Holdings Inc. office in San Francisco, California, U.S., on Tuesday, May 5, 2020. Experts believe this could tank used-car prices in the United States further, if the sale of these vehicles doesn't happen in a staggered manner over several months. Though Hertz ABS have faced downgrades, any pain from liquidations would likely be felt in smaller, lower-rated slices of the securities, the people said.

Hertz's woes are compounded by the complexity of its balance sheet, which includes more than $14bn of securitised debt.

France ready to mirror United Kingdom quarantine on visitors
Yes, although you will have to abide by the quarantine on your return where you will be expected to self-isolate for 14 days. Arrivals will also be strongly advised to download the NHS contact tracing app at the border "once rolled out nationally".

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