Dollar Thrifty Automotive Group Completes New $200 Million Asset Backed Financing
TULSA, Okla. // PRNewswire-FirstCall // -- Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) today announced that its Rental Car Finance Corp. subsidiary completed a $200 million issuance of Rental Car Asset Backed Variable Funding Notes, Series 2010-1, due September 2012, with scheduled amortization payments due over a six-month period beginning 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 275 basis points above the purchasing conduit's weighted average commercial paper rate, and there were no upfront fees associated with the transaction.
"We are very pleased with this financing transaction as it provides the Company with appropriate capacity for expected fleet purchases at a rate below those payable on our existing medium term notes," said Scott L. Thompson, President and Chief Executive Officer. "It also confirms that the Company is again able to access vehicle financing at competitive rates and enhancement levels and highlights our plan to lower the overall interest carry cost of our fleet consistent with our focus on return on assets."
The Company noted that, as of March 31, 2010, it has repaid $200 million of its Series 2005-1 Notes, and that the remaining $200 million outstanding under that series will be amortized through June 2010. The Company's 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 has no significant corporate debt maturities until June 2013 when the Company's existing Senior Secured Term Loan comes due.
The Series 2010-1 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 2010-1 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.
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 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, which have continued to depress consumer confidence and spending levels;
- whether ongoing governmental and regulatory initiatives in the United States and elsewhere to stimulate economic growth will be successful;
- the effectiveness of actions we take to manage costs and liquidity and whether further reductions in the scope of our operations will be necessary in light of the economic environment;
- our ability to obtain cost-effective financing as needed (including replacement of asset backed medium term notes and other indebtedness as it comes due) without unduly restricting operational flexibility, particularly if global economic conditions and credit markets fail to improve;
- 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;
- whether efforts to revitalize the U.S. automotive industry are successful, particularly in light of our dependence on vehicle supply from U.S. automotive manufacturers;
- the impact of pricing and other actions by competitors;
- 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 our ability to obtain any necessary waivers or consents with respect to recent developments involving Ambac;
- the cost and other terms of acquiring and disposing of automobiles and the impact of conditions in the used car market on our ability to reduce our fleet capacity as and when projected by our plans;
- the potential for significant cash tax payments in 2010 as a result of the reduction in our fleet size and the resulting impact of our inability to defer gains on the disposition of our vehicles under our like-kind exchange program;
- our ability to manage our fleet mix to match demand and reduce vehicle depreciation costs, particularly in light of the significant increase in the level of Non-Program Vehicles (i.e., those vehicles not acquired through a guaranteed residual value program) in our fleet and our exposure to the used car market;
- the impact of our strategy to increase holding periods for vehicles in our fleet, including potential adverse customer perceptions of the quality of our fleet and increased servicing costs;
- airline travel patterns, including disruptions or reductions in air travel resulting from airline bankruptcies, industry consolidation, capacity reductions and pricing actions;
- local market conditions where we and our franchisees do business, including whether franchisees will continue to have access to capital as needed;
- volatility in gasoline prices;
- 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 natural catastrophes and 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.