Moody's backs Hertz ratings, sees boost from deal
NEW YORK (AP) — Moody's Investors Service on Thursday confirmed its ratings for Hertz Global Holdings Inc., including its "B1" corporate family and probability of default ratings, saying that its pending acquisition of one of its rivals will help it stay competitive and maintain its current ratings.
The ratings service said the purchase of Dollar Thrifty Automotive Group Inc. will give Hertz a "well-established and highly competitive position" in the low-cost segment of the U.S. car rental market, where it currently lags its rivals. And the move should result in about $160 million of cost savings over the next two years, along with additional opportunities for growth, Moody's said.
Last month, Park Ridge, N.J.-based Hertz reached a deal to buy Tulsa, Okla.-based Dollar Thrifty for $87.50 per share, or about $2.3 billion.
A Hertz affiliate began a tender offer for Dollar Thrifty shares earlier this month. The tender offer expires on Oct. 5 and the deal remains subject to approval by Dollar Thrifty shareholders.
Moody's ratings cover about $3.8 billion in Hertz debt.
Hertz shares rose 18 cents to close at $13.91, while Dollar Thrifty shares rose 36 cents to $86.89.