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Another Bumpy Ride Ahead?

31 July 2017 by lberuti

Late on Friday, HTZ ( The Hertz Corporation ) said that it could not meet all the conditions to redeem some of its 2019 notes and that it has to call off the plan announced un June, when the company sold new bonds to help optimize its capital structure. HTZ has not reported earnings yet – it will do so on the 8th August – and it sparked speculation that quarterly results could be worse than expected. The announcement led investors to suspect that banks are hesitating to refinance the money losing auto renter and want more liquidity preserved. Htz’s 5-year risk premium had a pretty rough ride following the previous set of results back in May, when the company’s 5-year default probability (PD) went from 58% to 68% in a few sessions. Investors could be in for a similar kind of ride. The 5-year PD which stood at 57% last Thursday shot up to 62% at the close.