For what purposes have the letters of credit been issued by Dollar Rent A Car?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
| e Limitation | ||
|---|---|---|
| Non-Vehicle Debt | ||
| First Lien RCF | $ 1,251 | $ 1,251 |
| Total Non-Vehicle Debt | 1,251 | 1,251 |
| Vehicle Debt | ||
| HVF III Series 2021-A | 1,603 | — |
| European ABS | 307 | — |
| Hertz Canadian Securitization | 38 | — |
| Australian Securitization | 4 | — |
| New Zealand RCF | 5 | — |
| U.K. Financing Facility | 61 | — |
| Other Vehicle Debt | 49 | — |
| Total Vehicle Debt | 2,067 | — |
| Total | $ 3,318 | $ 1,251 |
Letters of Credit
As of December 31, 2024, there were outstanding standby letters of credit totalin
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, as of December 31, 2024, the company had outstanding standby letters of credit totaling $835 million. A significant portion, $574 million, was issued under the First Lien RCF, and $245 million was issued under the Term C Loan. The document specifies that no further letters of credit could be issued under the Term C Loan as of that date.
These letters of credit serve several key purposes for Dollar Rent A Car. Primarily, they provide credit enhancement for the company's asset-backed securitization facilities. Additionally, they support the company's insurance programs, ensuring that Dollar Rent A Car can meet its insurance obligations.
Furthermore, the letters of credit are used to support Dollar Rent A Car's vehicle rental concessions and leaseholds. This indicates that these financial instruments play a role in securing and maintaining the locations from which Dollar Rent A Car operates its rental services. As of December 31, 2024, none of the issued letters of credit had been drawn upon, suggesting that they were being used as a precautionary measure rather than to cover actual liabilities.