HERC HOLDINGS INCHRI
HERC HOLDINGS INC Debt Disclosure
Debt
The Company's debt consists of the following (in millions):
Weighted Average Effective Interest Rate at December 31, 2025 | Weighted Average Stated Interest Rate at December 31, 2025 | Fixed or Floating Interest Rate | Maturity | December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||
| Senior Notes | |||||||||||||||||||||||||||||||||||
| 2027 Notes | N/A | N/A | N/A | N/A | $ | — | $ | 1,200 | |||||||||||||||||||||||||||
| 2029 Notes | 6.91% | 6.63% | Fixed | 2029 | 800 | 800 | |||||||||||||||||||||||||||||
| 2030 Notes | 7.25% | 7.00% | Fixed | 2030 | 1,650 | — | |||||||||||||||||||||||||||||
| 2031 Notes | 5.94% | 5.75% | Fixed | 2031 | 600 | — | |||||||||||||||||||||||||||||
| 2033 Notes | 7.43% | 7.25% | Fixed | 2033 | 1,100 | — | |||||||||||||||||||||||||||||
| 2034 Notes | 6.14% | 6.00% | Fixed | 2034 | 600 | — | |||||||||||||||||||||||||||||
| Other Debt | |||||||||||||||||||||||||||||||||||
| New ABL Credit Facility | N/A | 5.10% | Floating | 2030 | 2,047 | — | |||||||||||||||||||||||||||||
| Prior ABL Credit Facility | N/A | N/A | N/A | N/A | — | 1,621 | |||||||||||||||||||||||||||||
| Term Loan Facility | 5.79% | 5.52% | Floating | 2032 | 750 | — | |||||||||||||||||||||||||||||
| AR Facility | N/A | 4.68% | Floating | 2026 | 475 | 400 | |||||||||||||||||||||||||||||
| Finance lease liabilities | 4.51% | N/A | Fixed | 2026-2044 | 81 | 77 | |||||||||||||||||||||||||||||
Unamortized debt issuance costs and debt discount(a) | (56) | (12) | |||||||||||||||||||||||||||||||||
| Total debt | 8,047 | 4,086 | |||||||||||||||||||||||||||||||||
| Less: Current maturities of long-term debt | (26) | (17) | |||||||||||||||||||||||||||||||||
| Long-term debt, net | $ | 8,021 | $ | 4,069 | |||||||||||||||||||||||||||||||
(a) Unamortized debt issuance costs totaling $12 million related to the New ABL Credit Facility and AR Facility (as each is defined below) as of December 31, 2025 and $6 million related to the Prior ABL Credit Facility and AR Facility (as each is defined below) as of December 31, 2024, are included in "Other long-term assets" in the consolidated balance sheets.
The effective interest rate for the fixed rate 2029 Notes, 2030 Notes, 2031 Notes, 2033 Notes, and 2034 Notes (as defined below) includes the stated interest on the notes and the amortization of any debt issuance costs. The effective interest rate for the variable rate Term Loan Facility (as defined below) includes the stated interest on the loan and the amortization of debt discount and debt issuance costs.
Maturities
The nominal principal amounts of maturities of debt for each of the periods ending December 31 are as follows (in millions):
| 2026 | $ | 26 | |||
| 2027 | 21 | ||||
| 2028 | 497 | ||||
| 2029 | 819 | ||||
| 2030 | 3,713 | ||||
| Thereafter | 3,027 | ||||
| Total | $ | 8,103 | |||
The Company's liquidity needs arise from the funding of its costs of operations and capital expenditures, debt service on its indebtedness, funding acquisitions, payment of dividends and repurchases of its shares. The Company believes that cash generated from operations and cash received from the disposal of rental and other equipment, together with amounts available under its senior secured asset-based revolving credit facility (the "New ABL Credit Facility") and AR Facility (as defined below) will be adequate to permit the Company to meet its obligations over the next 12 months.
Senior Notes—2027 Notes
On July 9, 2019, the Company issued $1.2 billion aggregate principal amount of its 5.50% Senior Notes due 2027 (the “2027 Notes”). On December 16, 2025, the Company redeemed the $1.2 billion outstanding principal of the 2027 Notes at a redemption price of 100.00%, plus interest accrued to, but excluding December 16, 2025. The Company used the combined net proceeds from its offering of the 2031 Notes and 2034 Notes (both as defined below), together with certain other borrowings by the Company, to redeem the 2027 Notes and to pay related fees and expenses. The Company recorded a loss on early extinguishment of debt of $2 million comprised of unamortized debt issuance costs.
Senior Notes—2029 Notes
On June 7, 2024, the Company issued $800 million aggregate principal amount of its 6.625% Senior Notes due 2029 (the "2029 Notes"). Interest on the 2029 Notes accrues at the rate of 6.625% per annum and is payable semi-annually in arrears on June 15 and December 15. The 2029 Notes will mature on June 15, 2029.
Ranking; Guarantees
The 2029 Notes are the Company's senior unsecured obligations, ranking equally in right of payment with all of the Company's existing and future senior indebtedness, effectively junior to any of the Company's existing and future indebtedness, including the New ABL Credit Facility and Term Loan Facility (as defined below), to the extent of the value of the assets securing such indebtedness, and senior in right of payment to any of the Company's existing and future subordinated indebtedness. The 2029 Notes are guaranteed on a senior unsecured basis, subject to limited exceptions including special purpose securitization subsidiaries, by the Company's current and future domestic subsidiaries.
Redemption
The Company may, at its option, redeem the 2029 Notes, in whole or in part, at any time prior to June 15, 2026, at a price equal to 100% of the aggregate principal amount of the 2029 Notes, plus the applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may, at its option, redeem the 2029 Notes, in whole or in part, at any time (i) on or after June 15, 2026 and prior to June 15, 2027, at a price equal to 103.313% of the principal amount of the 2029 Notes, (ii) on or after June 15, 2027 and prior to June 15, 2028, at a price equal to 101.656% of the principal amount of the 2029 Notes and (iii) on or after June 15, 2028, at a price equal to 100.00% of the principal amount of the 2029 Notes, in each case, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time on or prior to June 15, 2026, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2029 Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 106.625% of the principal amount of the 2029 Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Covenants
The indenture governing the 2029 Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: indebtedness; restricted payments; liens; dispositions of proceeds from asset sales; transactions with affiliates; dividends and other payment restrictions affecting restricted subsidiaries; designations of unrestricted subsidiaries; and mergers, consolidations and sale of assets. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the 2029 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. If the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the 2029 Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
The indenture also provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or is continuing, the trustee or the holders of at least 30% in aggregate principal amount of the 2029 Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
Senior Notes—2030 Notes
On June 2, 2025, the Company issued $1.65 billion aggregate principal amount of its 7.00% Senior Notes due 2030 (the "2030 Notes"). The net proceeds were used to finance, in part, the H&E acquisition and to pay related fees and expenses. Interest on
the 2030 Notes accrues at the rate of 7.00% per annum and is payable semi-annually in arrears on June 15 and December 15 of each year. The 2030 Notes will mature on June 15, 2030.
Ranking; Guarantees
The 2030 Notes are the Company's senior unsecured obligations, ranking equally in right of payment with all of the Company's existing and future senior indebtedness, effectively junior to any of the Company's existing and future secured indebtedness, including the New ABL Credit Facility and Term Loan Facility (as defined below), to the extent of the value of the assets securing such indebtedness, and senior in right of payment to any of the Company's existing and future subordinated indebtedness. The 2030 Notes are guaranteed on a senior unsecured basis, subject to limited exceptions including special purpose securitization subsidiaries, by the Company's current and future domestic subsidiaries.
Redemption
The Company may, at its option, redeem the 2030 Notes, in whole or in part, at any time prior to June 15, 2027, at a price equal to 100% of the aggregate principal amount of the 2030 Notes, plus the applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may, at its option, redeem the 2030 Notes, in whole or in part, at any time (i) on or after June 15, 2027 and prior to June 15, 2028, at a price equal to 103.500% of the principal amount of the 2030 Notes, (ii) on or after June 15, 2028 and prior to June 15, 2029, at a price equal to 101.750% of the principal amount of the 2030 Notes and (iii) on or after June 15, 2029, at a price equal to 100.000% of the principal amount of the 2030 Notes, in each case, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time on or prior to June 15, 2027, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2030 Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 107.00% of the principal amount of the 2030 Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Covenants
The indenture governing the 2030 Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: indebtedness; restricted payments; liens; dispositions of proceeds from asset sales; transactions with affiliates; dividends and other payment restrictions affecting restricted subsidiaries; designations of unrestricted subsidiaries; and mergers, consolidations and sale of assets. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the 2030 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. If the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the 2030 Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
The indenture also provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or is continuing, the trustee or the holders of at least 30% in aggregate principal amount of the 2030 Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
Senior Notes—2031 Notes
On December 16, 2025, the Company issued $600 million aggregate principal amount of its 5.75% Senior Notes due 2031 (the "2031 Notes"). The net proceeds, together with certain other borrowings by the Company, were used to redeem the 2027 Notes and to pay related fees and expenses. Interest on the 2031 Notes accrues at the rate of 5.75% per annum and will be payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026. The 2031 Notes will mature on March 15, 2031.
Ranking; Guarantees
The 2031 Notes are the Company's senior unsecured obligations, ranking equally in right of payment with all of the Company's existing and future senior indebtedness, effectively junior to any of the Company's existing and future indebtedness, including the New ABL Credit Facility and Term Loan Facility (both as defined below), to the extent of the value of the assets securing such indebtedness, and senior in right of payment to any of the Company's existing and future subordinated indebtedness. The 2031 Notes are guaranteed on a senior unsecured basis, subject to limited exceptions including special purpose securitization subsidiaries, by the Company's current and future domestic subsidiaries.
Redemption
The Company may, at its option, redeem the 2031 Notes, in whole or in part, at any time prior to March 15, 2028, at a price equal to 100% of the aggregate principal amount of the 2031 Notes, plus the applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may, at its option, redeem the 2031 Notes, in whole or in part, at any time (i) on or after March 15, 2028 and prior to March 15, 2029, at a price equal to 102.875% of the principal amount of the 2031 Notes, (ii) on or after March 15, 2029 and prior to March 15, 2030, at a price equal to 101.438% of the principal amount of the 2031 Notes and (iii) on or after March 15, 2030, at a price equal to 100.000% of the principal amount of the 2031 Notes, in each case, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time on or prior to March 15, 2028, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2031 Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 105.750% of the principal amount of the 2031 Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Covenants
The indenture governing the 2031 Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: indebtedness; restricted payments; liens; dispositions of proceeds from asset sales; transactions with affiliates; dividends and other payment restrictions affecting restricted subsidiaries; designations of unrestricted subsidiaries; and mergers, consolidations and sale of assets. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the 2031 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. If the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the 2031 Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
The indenture also provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or
is continuing, the trustee or the holders of at least 30% in aggregate principal amount of the 2031 Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
Senior Notes—2033 Notes
On June 2, 2025, the Company issued $1.1 billion aggregate principal amount of its 7.25% Senior Notes due 2033 (the "2033 Notes"). The net proceeds were used to finance, in part, the H&E acquisition and to pay related fees and expenses. Interest on the 2033 Notes accrues at the rate of 7.25% per annum and is payable semi-annually in arrears on June 15 and December 15. The 2033 Notes will mature on June 15, 2033.
Ranking; Guarantees
The 2033 Notes are the Company's senior unsecured obligations, ranking equally in right of payment with all of the Company's existing and future senior indebtedness, effectively junior to any of the Company's existing and future indebtedness, including the New ABL Credit Facility and Term Loan Facility (both as defined below), to the extent of the value of the assets securing such indebtedness, and senior in right of payment to any of the Company's existing and future subordinated indebtedness. The 2033 Notes are guaranteed on a senior unsecured basis, subject to limited exceptions including special purpose securitization subsidiaries, by the Company's current and future domestic subsidiaries.
Redemption
The Company may, at its option, redeem the 2033 Notes, in whole or in part, at any time prior to June 15, 2028, at a price equal to 100% of the aggregate principal amount of the 2033 Notes, plus the applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may, at its option, redeem the 2033 Notes, in whole or in part, at any time (i) on or after June 15, 2028 and prior to June 15, 2029, at a price equal to 103.625% of the principal amount of the 2033 Notes, (ii) on or after June 15, 2029 and prior to June 15, 2030, at a price equal to 101.813% of the principal amount of the 2033 Notes and (iii) on or after June 15, 2030, at a price equal to 100.000% of the principal amount of the 2033 Notes, in each case, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time on or prior to June 15, 2028, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2033
Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 107.250% of the principal amount of the 2033 Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Covenants
The indenture governing the 2033 Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: indebtedness; restricted payments; liens; dispositions of proceeds from asset sales; transactions with affiliates; dividends and other payment restrictions affecting restricted subsidiaries; designations of unrestricted subsidiaries; and mergers, consolidations and sale of assets. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the 2033 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. If the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the 2033 Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
The indenture also provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or
is continuing, the trustee or the holders of at least 30% in aggregate principal amount of the 2033 Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
Senior Notes—2034 Notes
On December 16, 2025, the Company issued $600 million aggregate principal amount of its 6.00% Senior Notes due 2034 (the "2034 Notes" and, together with the 2029 Notes, 2030 Notes, 2031 Notes and 2033 Notes, the "Notes"). The net proceeds, together with certain other borrowings by the Company, were used to redeem the 2027 Notes and to pay related fees and expenses. Interest on the 2034 Notes accrues at the rate of 6.00% per annum and will be payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026. The 2034 Notes will mature on March 15, 2034.
Ranking; Guarantees
The 2034 Notes are the Company's senior unsecured obligations, ranking equally in right of payment with all of the Company's existing and future senior indebtedness, effectively junior to any of the Company's existing and future indebtedness, including the New ABL Credit Facility and Term Loan Facility (both as defined below), to the extent of the value of the assets securing such indebtedness, and senior in right of payment to any of the Company's existing and future subordinated indebtedness. The 2034 Notes are guaranteed on a senior unsecured basis, subject to limited exceptions including special purpose securitization subsidiaries, by the Company's current and future domestic subsidiaries.
Redemption
The Company may, at its option, redeem the 2034 Notes, in whole or in part, at any time prior to March 15, 2029, at a price equal to 100% of the aggregate principal amount of the 2034 Notes, plus the applicable make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may, at its option, redeem the 2034 Notes, in whole or in part, at any time (i) on or after March 15, 2029 and prior to March 15, 2030, at a price equal to 103.000% of the principal amount of the 2034 Notes, (ii) on or after March 15, 2030 and prior to March 15, 2031, at a price equal to 101.500% of the principal amount of the 2034 Notes and (iii) on or after March 15, 2031, at a price equal to 100.000% of the principal amount of the 2034 Notes, in each case, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time on or prior to March 15, 2029, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the 2034 Notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 106.00% of the principal amount of the 2034 Notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Covenants
The indenture governing the 2034 Notes contains certain covenants applicable to the Company and its restricted subsidiaries, including limitations on: indebtedness; restricted payments; liens; dispositions of proceeds from asset sales; transactions with affiliates; dividends and other payment restrictions affecting restricted subsidiaries; designations of unrestricted subsidiaries; and mergers, consolidations and sale of assets. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the 2034 Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date. If
the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the 2034 Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
Events of Default
The indenture also provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or
is continuing, the trustee or the holders of at least 30% in aggregate principal amount of the 2034 Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
New ABL Credit Facility
On June 2, 2025, Herc Holdings, Herc, Matthews Equipment Limited and certain other subsidiaries of Herc Holdings entered into a credit agreement with respect to a new senior secured asset-based revolving credit facility (the "New ABL Credit Facility"), which refinanced in full and replaced the then existing asset-based credit facility entered into on July 31, 2019 ("Prior ABL Credit Facility") and related collateral/security agreements. The Company borrowed $2.5 billion under the New ABL Credit Facility to repay all amounts outstanding under the Prior ABL Credit Facility and fund, in part, the H&E acquisition.
The New ABL Credit Facility provides for aggregate maximum borrowings of up to $4.0 billion (subject to availability under a borrowing base). Up to $250 million of the revolving loan facility is available for the issuance of letters of credit, subject to certain conditions including issuing lender participation. Subject to the satisfaction of certain conditions and limitations, the New ABL Credit Facility allows for the addition of incremental revolving commitments and/or incremental term loans.
Maturity
The New ABL Credit Facility matures on June 2, 2030.
Guarantees; Collateral/Security
The obligations of each of the borrowers under the New ABL Credit Facility are guaranteed by each of Herc Holdings’ direct and indirect U.S. and Canadian subsidiaries, with certain exceptions, including special purpose securitization subsidiaries. The obligations of the borrowers under the New ABL Credit Facility and the guarantees thereof are secured by security interests in substantially all of the assets of each borrower and guarantor, including pledges of all the capital stock of all of their direct subsidiaries, with certain exceptions. The security interests under the New ABL Credit Facility rank pari passu with the security interests granted to the Term Loan Facility. The liens securing the New ABL Credit Facility are subject to certain exceptions. Also, subject to certain limitations and conditions, the New ABL Credit Facility permits the incurrence of future secured debt on a basis either pari passu with, or subordinated to, the liens securing the New ABL Credit Facility.
On June 2, 2025, in connection with the New ABL Credit Facility, the Company and certain of its U.S. subsidiaries of entered into an Amended and Restated U.S. Guarantee and Collateral Agreement, and Matthews Equipment Limited and certain Canadian subsidiaries entered into an Amended and Restated Canadian Guarantee and Collateral Agreement.
Interest
The interest rates applicable to any loans under the New ABL Credit Facility are based, at the option of the borrowers, on (i) a floating rate based on Term SOFR (for loans denominated in U.S. dollars) or Term CORRA (for loans denominated in Canadian dollars) plus an initial margin of 1.375% per annum or (ii) a base rate plus an initial margin of 0.375%, in each case, where margin is adjusted under the New ABL Credit Facility based on the quarterly average excess availability under the New ABL Credit Facility.
Covenants
The New ABL Credit Facility contains a number of covenants that, among other things, limit or restrict the ability of the borrowers and their subsidiaries to incur additional indebtedness, prepay other indebtedness, make dividends and other restricted payments, create or incur liens, make acquisitions and other investments, engage in mergers, consolidations or sales of assets, engage in certain transactions with affiliates, and enter into certain restrictive agreements limiting the ability to create or incur liens. In addition, under the New ABL Credit Facility, upon excess availability falling below certain levels, the borrowers will be required to comply with a minimum fixed charge coverage ratio of no less than 1.00:1.00.
Events of Default
The New ABL Credit Facility provides that the occurrence of any of the following events will constitute an event of default: payment default, breach of representation or warranty, covenant breach, cross default to other material indebtedness, certain bankruptcy events, dissolution, invalidity of the credit agreement or any intercreditor agreement (if any), judgment in excess of a certain monetary threshold, any security or guarantee documents cease to be in effect, an ERISA event, pension event or a change of control. Upon the occurrence and during the continuation of an event of default, the agent may exercise remedies on behalf of the lenders, including accelerating the repayment of outstanding loans under the New ABL Credit Facility.
Prior ABL Credit Facility
The Company's Prior ABL Credit Facility, executed by Herc Holdings, Herc and certain other subsidiaries of Herc Holdings, provided a senior secured asset-based revolving credit facility with aggregate maximum borrowings of up to $3.5 billion (subject to availability under a borrowing base) that had a maturity date of July 5, 2027. Up to $250 million of the revolving loan facility was available for the issuance of letters of credit, subject to certain conditions including issuing lender participation. As discussed above, the Company used borrowings under the New ABL Credit Facility to repay all amounts outstanding under the Prior ABL Credit Facility on June 2, 2025.
Term Loan Facility
On June 2, 2025, the Company and certain other subsidiaries of the Company entered into a credit agreement (the "Term Loan Credit Agreement") with respect to a senior secured term loan facility (the "Term Loan Facility") of $750 million. Effective as of December 10, 2025, the Company entered into an amendment to the Term Loan Credit Agreement that reduced the interest rate margins while the total loans outstanding of $750 million remained unchanged.
The Company and each existing and future direct or indirect U.S. subsidiary of the Company (the “Guarantors”) provide unconditional guarantees of the obligations of the Company with certain exceptions, including special purpose securitization subsidiaries. In addition, the obligations of the Company under the Term Loan Facility and the guarantees of the Guarantors are secured by first priority security interests in substantially all of the tangible and intangible assets of the Company and the Guarantors, including pledges of all stock or other equity interests in direct subsidiaries owned by the Company and the Guarantors (but only up to 65% of the voting stock of each direct foreign subsidiary owned by the Company or any Guarantor). The security interests under the Term Loan Facility rank pari passu with the security interests granted pursuant to the New ABL Credit Facility. The security interests and pledges are subject to certain exceptions.
The principal obligations under the Term Loan Facility are to be repaid in quarterly installments, beginning with the quarter ended March 15, 2026, in an aggregate amount equal to 1.00% per annum, with the balance due at the maturity of the Term Loan Facility. The Term Loan Facility matures on June 2, 2032. Amounts drawn under the Term Loan Facility bear annual interest at either the Term SOFR rate plus a margin of 1.75% or at a base rate (equal to the highest of Wells Fargo Bank, National Association’s prime rate, the federal funds rate plus 0.5%, or one month Term SOFR plus 1.0%) plus a margin of 0.75%.
The Term Loan Facility contains covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness; incur additional liens; make dividends and other restricted payments; and engage in mergers, acquisitions and dispositions. The Term Loan Facility does not include any financial covenants. The Term Loan Credit Agreement contains customary events of default. If an event of default occurs, the lenders are entitled to accelerate the loans made thereunder and exercise rights against the collateral.
On June 2, 2025, in connection with the credit agreement, the Company and certain of its U.S. subsidiaries entered into a U.S. Guarantee and Collateral Agreement, and Matthews Equipment Limited and certain Canadian subsidiaries entered into a Canadian Guarantee and Collateral Agreement.
The Company used the proceeds of the Term Loan Facility to finance, in part, the H&E acquisition and to pay related fees and expenses.
Accounts Receivable Securitization Facility
The accounts receivable securitization facility (the "AR Facility") was amended in August 2025 to extend the maturity date to August 31, 2026 and in December 2025 aggregate commitments were increased from $400 million to $475 million. In connection with the AR Facility, Herc sells its accounts receivables on an ongoing basis to Herc Receivables U.S. LLC, a wholly-owned special-purpose entity (the "SPE"). The SPE's sole business consists of the purchase by the SPE of accounts
receivable from Herc and borrowing by the SPE against the eligible accounts receivable from the lenders under the facility. The borrowings are secured by liens on the accounts receivable and other assets of the SPE. Collections on the accounts receivable are used to service the borrowings. The SPE is a separate legal entity that is consolidated in the Company's financial statements. The SPE assets are owned by the SPE and are not available to settle the obligations of the Company or any of its other subsidiaries. Herc is the servicer of the accounts receivable under the AR Facility. All of the obligations of the servicer and certain indemnification obligations of the SPE under the agreements governing the AR Facility are guaranteed by Herc pursuant to a performance guarantee. The AR Facility is excluded from current maturities of long-term debt as the Company has the intent and ability to fund the AR Facility's borrowings on a long-term basis either by further extending the maturity date of the AR Facility or by utilizing the capacity available at the balance sheet date under the New ABL Credit Facility.
The agreements governing the AR Facility contain restrictions and covenants which include limitations applicable to Herc and the SPE on the creation of certain liens, and restrictions and covenants which include limitations applicable to the SPE on the making of certain restricted payments, and limitations applicable to Herc and the SPE with respect to certain corporate acts such as mergers, consolidations and the sale of substantially all assets, with certain exceptions. The Company was in compliance with all such covenants as of December 31, 2025.
The financing agreement with the lenders provides for customary events of default (subject to customary exceptions, thresholds and grace periods) including, without limitation, failure to perform covenants, ineffectiveness of transaction documents, invalidity of security interests or failure to cooperate in the administrative agent's assumption of control of accounts, material inaccuracy of representations or warranties, failure of certain ratios related to the accounts receivables, specified cross default and cross acceleration to other material indebtedness, certain bankruptcy events, certain ERISA events, material judgments, material adverse effect and change in control.
Bridge Facility
In February 2025, the Company entered into a commitment letter for a senior secured 364-day term loan bridge facility (the "Bridge Facility") for an aggregate principal amount of up to $4.5 billion that provided committed financing for the acquisition of H&E. No balances were drawn against this facility, as the commitment letter was terminated after entering into the 2030 Notes and 2033 Notes offering, Term Loan Facility and refinancing of the Prior ABL Credit Facility and subsequent borrowings under the New ABL Credit Facility.
Borrowing Capacity and Availability
After outstanding borrowings, the following was available to the Company under the New ABL Credit Facility and AR Facility as of December 31, 2025 (in millions):
| Remaining Capacity | Availability Under Borrowing Base Limitation | ||||||||||
| New ABL Credit Facility | $ | 1,900 | $ | 1,880 | |||||||
| AR Facility | — | — | |||||||||
| Total | $ | 1,900 | $ | 1,880 | |||||||
Letters of Credit
As of December 31, 2025, $53 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The New ABL Credit Facility had $197 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 10, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 15, 2017 | |
| 2015 | Feb 29, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.