XML 25 R16.htm IDEA: XBRL DOCUMENT v3.22.2
Debt
 6 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
Debt Debt
The Company's debt consists of the following (in millions):
Weighted Average Effective Interest Rate at June 30, 2022
Weighted Average Stated Interest Rate at June 30, 2022
Fixed or Floating Interest RateMaturityJune 30,
2022		December 31,
2021
Senior Notes
2027 Notes5.61%5.50%Fixed2027$1,200.0 $1,200.0 
Other Debt
ABL Credit FacilityN/A2.65%Floating20241,016.1 456.0 
AR FacilityN/A2.18%Floating2022250.0 225.0 
Finance lease liabilities2.89%N/AFixed2022-202953.9 52.6 
Unamortized Debt Issuance Costs(a)
(5.7)(6.1)
Total debt2,514.3 1,927.5 
Less: Current maturities of long-term debt(11.0)(11.4)
Long-term debt, net$2,503.3 $1,916.1 
(a)    Unamortized debt issuance costs totaling $4.1 million and $5.0 million related to the ABL Credit Facility and AR Facility (as each is defined below) as of June 30, 2022 and December 31, 2021, respectively, and are included in "Other long-term assets" in the condensed consolidated balance sheets.

The effective interest rate for the fixed rate 2027 Notes (as defined below) includes the stated interest on the notes and the amortization of any debt issuance costs.
Senior 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"). Interest on the 2027 Notes accrues at the rate of 5.50% per annum and is payable semi-annually in arrears on January 15 and July 15. The 2027 Notes will mature on July 15, 2027. Additional information about the 2027 Notes is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021.

ABL Credit Facility
On July 31, 2019, Herc Holdings, Herc and certain other subsidiaries of Herc Holdings entered into a credit agreement with respect to a senior secured asset-based revolving credit facility (the "ABL Credit Facility"). The ABL Credit Facility provides (subject to availability under a borrowing base) for aggregate maximum borrowings of up to $1,750 million under a revolving loan facility. 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 ABL Credit Facility allows for the addition of incremental revolving commitments and/or incremental term loans. The ABL Credit Facility matures on July 31, 2024. Additional information about the ABL Credit Facility is included in Note 11, "Debt" to the Company's financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. On July 5, 2022, the Company entered into an amendment of the ABL Credit Facility, see Note 17, "Subsequent Event" for further information.

Accounts Receivable Securitization Facility
In September 2018, the Company entered into an accounts receivable securitization facility (the "AR Facility"). The AR Facility was amended in August 2021 to extend the maturity date to August 31, 2022 and increase the aggregate commitments from $175 million to $200 million. In October 2021, the Company increased the aggregate commitments to $225 million and, in January 2022, further increased the aggregate commitments to $250 million. In connection with the AR Facility, Herc and one of its wholly-owned subsidiaries sell their 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 the Herc subsidiary seller 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 Herc subsidiary seller and 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 consummate refinancing and extend the term of the agreement.
Borrowing Capacity and Availability
After outstanding borrowings, the following was available to the Company under the ABL Credit Facility and AR Facility as of June 30, 2022 (in millions):
Remaining
Capacity		Availability Under
Borrowing Base
Limitation
ABL Credit Facility$709.1 $709.1 
AR Facility— — 
Total $709.1 $709.1 

Letters of Credit
As of June 30, 2022, $24.8 million of standby letters of credit were issued and outstanding, none of which have been drawn upon. The ABL Credit Facility had $225.2 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.