Hertz and its bondholders are looking for ways to shrink the company’s near half-a-million vehicle fleet in what is turning into a tense standoff.
It is understood that the 494,000 used vehicles in Hertz’s fleet are linked to its asset-backed securities and leased to it. Ordinarily, when a company files for bankruptcy, like Hertz has done, it needs to confirm or reject the master lease tied to the debt. In the event of it keeping the lease, it has to continue making payments on the vehicles but if it chooses to ditch the master lease, the collateral is liquidated to pay back bondholders.
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