Rental Car Finance Corp, a subsidiary of Dollar Thrifty Automotive Group, finalized loans of $200 million, the bulk of which the car rental giant plans to use towards increasing the size of its fleet. The Rental Car Asset Backed Variable Funding Notes, Series 2010-1, are to be paid off starting in April 2012, with amortization payments scheduled to be completed in September of that year.
President and CEO of Dollar Thrifty Automotive Group Scott L Thompson stated that the company was pleased with the loan, since fleet purchases will now be at a rate below that of the current medium term notes. Thompson went on to say that this step confirms that Dollar Thrifty is once again able to procure competitive rates for its vehicle financing plans, which will ultimately prove to provide a higher rate of return on assets.
Dollar Thrifty has repaid half of its existing Series 2005-1 notes as of 31 March of 2010, and the $200 million which remain will be amortized through June 2010. Following the completion of the Series 2005-1 notes in June, the company sees the maturity of its Series 2006-1 notes beginning in December 2010.
The $200 million Series 2010-1 notes are rated AA by Dominion Bond Rating Service, Inc, had no upfront fees as part of the transaction, and have an advance rate of roughly 65 percent. Interest on the notes is 275 basis points higher than the purchasing conduit’s weighted average commercial paper weight.