Why Hertz Global Holdings Stock Popped Today
Hertz Global Holdings (NASDAQ: HTZ) stock is flying on Friday, up 14.1% through 1:30 p.m. ET, and for a most peculiar reason: Hertz is taking on a lot of debt, and at very high interest rates.
Of course, on the plus side, Hertz is also paying down a lot of debt. As the company announced this morning, it has just upsized a debt offering first announced yesterday, from $750 million to $1 billion.
Hertz wants to pay down about half of its $2 billion bank revolving credit facility, you see. Problem is, it doesn't have a lot of cash lying around to do that with. Current cash reserves are below $500 million, and Hertz is furthermore free-cash-flow-negative, burning $1 billion a year. So it needs to float some bonds to raise the cash it wants.
Source Fool.com
