TULSA, Okla., Oct. 28 /PRNewswire-FirstCall/ -- Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) today announced that its Rental Car Finance Corp. subsidiary completed a private placement of Rental Car Asset Backed Variable Funding Notes, Series 2010-3. When fully funded, the notes will provide $450 million of additional financing. The revolving period for the notes ends in October 2011, with scheduled amortization payments due over a six-month period beginning in November 2011 and ending in April 2012. The notes are rated AA by Dominion Bond Rating Service, Inc. and have an advance rate of approximately 65%. The notes bear interest at a spread of 125 basis points above each purchasing conduit's weighted average commercial paper rate when drawn.
"During 2010, we have completed three fleet financing transactions totaling $950 million, providing significant financial flexibility in advance of future debt maturities," said Scott L. Thompson, President and Chief Executive Officer. "We are pleased with our access to the market at competitive interest rates and enhancement levels."
The Company noted that its next scheduled fleet debt maturity begins in December 2010 when $600 million of its Series 2006-1 notes begin amortizing over a six-month period ending in May 2011. The Company also noted that it has no significant scheduled corporate debt maturities until June 2013, when borrowings under the Company's existing Senior Secured Credit Facility come due and the Facility terminates.
The Series 2010-3 notes have not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release is neither an offer to sell nor a solicitation of an offer to buy any of the Series 2010-3 notes and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such offer, solicitation or sale is unlawful.
About Dollar Thrifty Automotive Group, Inc.
Dollar Thrifty Automotive Group, Inc. is headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious travelers in over 80 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,000 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network. For additional information, visit www.dtag.com or the brand sites at www.dollar.com and www.thrifty.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" about our expectations, plans and performance. These statements use such words as "may," "will," "expect," "believe," "intend," "should," "could," "anticipate," "estimate," "forecast," "project," "plan" and similar expressions. These statements do not guarantee future performance and Dollar Thrifty Automotive Group, Inc. assumes no obligation to update them. Risks and uncertainties that could materially affect future results include:
- the impact on our results and liquidity if we become obligated to pay a termination fee to Hertz Global Holdings, Inc. ("Hertz"), which will depend on whether we complete a qualifying business combination transaction within 12 months of the October 1, 2010 termination date of our merger agreement with Hertz, and whether and the extent to which the relevant third party would bear all or any portion of that fee;
- whether Avis Budget Group, Inc. ("Avis") would obtain regulatory approval to engage in a business combination transaction with us and, if so, the conditions upon which such approval would be granted (including potential divestitures of assets or businesses of either company), whether we and Avis would reach agreement on the terms of such a transaction, whether our shareholders would approve the transaction and whether other conditions to consummation of the transaction would be satisfied or waived;
- the risks to our business and prospects pending any future business combination transaction, diversion of management's attention from day-to-day operations, a loss of key personnel, disruption of our operations, and the impact of pending or future litigation relating any business combination transaction;
- the risks to our business and growth prospects as a stand-alone company, in light of our dependence on future growth of the economy as a whole to achieve meaningful revenue growth in the key airport markets we serve, high barriers to entry in the insurance replacement market, and the impact of our limited financial resources on our ability to finance growth through acquisitions or to expand internationally;
- the impact of persistent pricing and demand pressures, particularly in light of the continuing volatility in the global financial and credit markets and concerns about global economic prospects and the timing and strength of a recovery, and whether consumer confidence and spending levels will improve;
- whether ongoing governmental and regulatory initiatives in the United States and elsewhere to stimulate economic growth will be successful;
- the impact of pricing and other actions by competitors, particularly as they increase fleet sizes in anticipation of seasonal activity;
- our ability to manage our fleet mix to match demand and meet our target for vehicle depreciation costs, particularly in light of the significant increase in the level of risk vehicles (i.e., those vehicles not acquired through a guaranteed residual value program) in our fleet and our exposure to the used vehicle market;
- the cost and other terms of acquiring and disposing of automobiles and the impact of conditions in the used vehicle market on our vehicle cost, including the impact on our results of expected increases in our vehicle depreciation costs in 2011 based on our current expectations with respect to the used vehicle market, and our ability to reduce our fleet capacity as and when projected by our plans;
- the timing and strength of a recovery in the U.S. automotive industry, particularly in light of our dependence on vehicle supply from U.S. automotive manufacturers;
- the effectiveness of actions we take to manage costs and liquidity;
- our ability to obtain cost-effective financing as needed (including replacement of asset backed notes and other indebtedness as it comes due) without unduly restricting operational flexibility;
- our ability to comply with financial covenants or to obtain necessary amendments or waivers, and the impact of the terms of any required amendments or waivers, such as potential reductions in lender commitments;
- our ability to manage the consequences under our financing agreements of an event of bankruptcy with respect to any of the monoline insurers that provide credit support for our asset backed financing structures, including Financial Guaranty Insurance Company, which has indicated that it has not satisfied the conditions for effectuating its surplus restoration plan as required by the New York State Insurance Department;
- the potential for significant cash tax payments in 2011 and beyond as a result of the reduction in our fleet size, our use of bonus depreciation methods and the resulting impact of our inability to defer gains on the disposition of our vehicles under our like-kind exchange program;
- airline travel patterns, including disruptions or reductions in air travel resulting from industry consolidation, capacity reductions, pricing actions or other events, such as airline bankruptcies;
- local market conditions where we and our franchisees do business, including whether franchisees will continue to have access to capital as needed;
- access to reservation distribution channels;
- disruptions in the operation or development of information and communication systems that we rely on, including those relating to methods of payment;
- the cost of regulatory compliance, costs and other effects of potential future initiatives, including those directed at climate change and its effects, and the costs and outcome of pending litigation; and
- the impact of other events that can disrupt consumer travel, such as natural and man-made catastrophes, pandemics and actual and perceived threats or acts of terrorism.
Forward-looking statements should be considered in light of information in this press release and other filings we make with the Securities and Exchange Commission.
SOURCE Dollar Thrifty Automotive Group, Inc.