Fitch Revises Hertz's Rating Watch to Negative from Evolving

NEW YORK--Sept. 12, 2005--Fitch Ratings has revised The Hertz Corporation (Hertz) and its subsidiaries Rating Watch status to Negative from Evolving. This action was in response to the announcement by Ford Motor Company (Ford) this morning of its intention to sell Hertz to a consortium of private equity investors composed of Clayton Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity (CCM group) for approximately $15 billion. This amount includes $5.6 billion for Ford's equity ownership of Hertz. Approximately $9.6 billion of unsecured debt at June 30, 2005 is affected by Fitch's action.

Rating Watch Negative indicates that Hertz's ratings could remain the same or lowered. Hertz's senior debt and commercial paper are currently rated 'BBB-' and 'F2'. It is expected that the Rating Watch would be resolved on or before Feb. 2, 20068, 2006, which would be concurrent with the completion of the refinancing of Hertz's existing long-term debt.

This afternoon, Ford announced its intention to sell Hertz to the CCM group. On April 20, 2005, Ford first announced its intention to monetize its investment in Hertz either through an initial public offering or a sale to a private equity firm. While recognizing Hertz's leadership position in its two core businesses, Fitch believes that the CCM group paid a full price for Hertz of approximately 2.2 times (x) book equity at June 30, 2005.

The purchase price could result in approximately $3 billion of goodwill being added to Hertz's balance sheet in addition to the existing $544 million at June 30, 2005. As a result, from a financial institutions' perspective, Hertz leverage will rise sharply, on a tangible basis, while the company's risk-adjusted capitalization could weaken. Initial debt funding for this transaction will be provided by a group of financial institutions. Hertz will seek to tender its long-term debt maturing before 2010 while Ford will seek to take out Hertz's debt maturing in 2010 and beyond.

The following ratings remain on Rating Watch with their status revised to Negative from Evolving by Fitch:

The Hertz Corporation

-- Senior Debt 'BBB-';

-- Commercial Paper 'F2'.

Hertz Finance Centre plc

-- Senior Debt 'BBB-';

-- Commercial Paper 'F2'.

Hertz Australia Pty. Ltd.

-- Commercial paper 'F2'.

Hertz Canada Ltd.

-- Commercial paper 'F2'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.