Hertz, the US-based car rental group, is seeking to alter terms of letters of credit (L/Cs) it uses in the course of its business as part of a fundamental restructuring of its finances.

The company has been badly affected by the impacts of the coronavirus pandemic on the travel industry and earlier this month it staved off bankruptcy after striking a deal with lenders to extend a critical payment deadline.

Missed payment

In April Hertz missed a payment to lenders for the leasing costs of some of its vehicles.

The company reached a deal to move the payment date to 22 May, by which time it must have completed "discussions with its key stakeholders with the goal to develop a financing strategy and structure that better reflects the economic impact of the COVID-19 global pandemic and Hertz' ongoing operating and financing requirements."

L/C waiver

Hertz says it has already entered into limited waiver agreements with certain of the lenders under its standard L/C facility and an alternate L/C facility.

It has also made similar agreements in respect of its senior term loan facility and its vehicle revolving credit facility

The company says these lenders agreed to extend the grace period to cure a default with respect to Hertz's obligation to reimburse drawings that occur under L/Cs during the waiver period, which also ends on 22 May.

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