Hertz Shares Plunge After Guidance Cut, Financing Plan

Hertz Global Holdings (HTZ) shares fell after the company on June 24, 2026 disclosed a linked private debt sale and a concurrent stock-lending arrangement and cut its preliminary second-quarter outlook, citing weaker used-car demand that pushed depreciation higher.

Exchangeable PIK Notes and Share Lending Offering

Hertz said in a Form 8-K filed on June 24 that its subsidiary, The Hertz Corporation, plans a private offering of $300 million aggregate principal amount of exchangeable senior first-lien secured payment-in-kind (PIK) notes due 2030, with an option for initial purchasers to buy up to an additional $45 million within 13 days.

The notes will mature on July 1, 2030, and bear interest payable semiannually on January 1 and July 1 starting in 2027. Each payment will include a cash portion and a PIK portion that increases principal. The notes will be guaranteed by Hertz Global Holdings and certain subsidiaries and secured on a first-lien basis by the same collateral backing Hertz Corp.’s existing first-lien credit facilities. They are exchangeable at Hertz Corp.’s election into cash, common stock, or a combination. Hertz may not redeem the notes before January 6, 2029, and later redemptions require the common stock to trade at least 130% of the notes’ exchange price for specified periods. Hertz intends to use net proceeds for general corporate purposes, including possible debt repayment.

Concurrently, Hertz registered $100 million of common stock on a Form S-3ASR to be loaned as Borrowed Shares to J.P. Morgan Securities LLC in a share-lending offering contingent on the closing of the private notes. J.P. Morgan will borrow the shares, sell them to the public, and return them later. Hertz will receive no proceeds from the sale and only a nominal lending fee. The share-lending is designed to facilitate hedging by investors in the exchangeable notes.

The filing caps newly issued shares deliverable on exchange at 19.9% of outstanding common shares measured immediately before the notes offering. Exchanges exceeding that cap would be settled in cash unless stockholder approval is obtained.

Together, the structure allows buyers of the exchangeable securities to hedge while limiting Hertz’s near-term equity proceeds. Potential dilution depends on exchanges or shareholder approval, altering near-term capital and dilution dynamics for investors.

Revised Q2 Outlook and Depreciation Impact

Hertz lowered its preliminary second-quarter adjusted corporate EBITDA outlook to a range of $50 million to $80 million, attributing the reduction primarily to unexpected weakness in the used-car market. Losses on vehicle sales in May offset gains from April, pushing net depreciation per unit per month to roughly $300 for the quarter.

Despite this, Hertz expects fleet size, revenue, revenue per day, and rental days for the quarter to be in line with or slightly above prior expectations. Demand remains healthy, capacity utilization is better than anticipated, and year-over-year revenue-per-day growth in Q2 has accelerated beyond the Q1 trend.

The guidance cut reflects residual-value losses on disposals rather than operational weakness. The share-lending offering explicitly supports hedging by holders of the exchangeable notes, meaning Hertz will not receive proceeds from share sales while the notes create exchangeable exposure. These moves reshape the company’s near-term capital structure and potential conditional equity dilution.