---

Hertz Finance Centre Euro-Commercial Paper Program Rated 'A-1' by S&P

9 July 1997

Hertz Finance Centre Euro-Commercial Paper Program Rated 'A-1' by S&P

    LONDON, July 9 -- Standard & Poor's today has assigned its
'A-1' rating to the $500 million Euro-commercial paper program of Hertz
Finance Centre PLC (a wholly owned subsidiary of Hertz Corp.). The program is
unconditionally guaranteed by Hertz Corp., whose corporate credit rating is
single-'A'-minus.
    Hertz Corp.'s ratings reflect Ford Motor Co.'s (single-'A'-plus corporate
credit rating) substantial ownership stake in the company, as well as Hertz's
strategic importance as Ford's largest customer. Until April 24, 1997, Ford
had owned 100% of Hertz, but sold 18.5% of Hertz in an initial public offering
on that date. Recent shifts in ownership of most of the major participants in
the car rental industry, along with Ford's de-emphasis on fleet sales, have
made Ford's ultimate ownership and support of Hertz less certain.
    Hertz, the largest car rental company in the world, participates in the
business and leisure rental segment of the car rental business. This segment
has been fiercely price competitive and typically has produced poor margins or
even losses for all participants, even during healthy economic periods.
However, ownership of most of the major industry participants recently has
shifted from car manufacturers, which could reduce overcapacity and thereby
lead to improved earnings for the industry. While Hertz's earnings have
improved since 1994, reaching a record level in 1996, its debt leverage has
remained in the mid-80% range for the last several years, high for a
transportation equipment lessor. However, Hertz does have relatively strong
financial flexibility, in large part due to the highly liquid nature of the
assets, and this is likely to continue going forward, even with a reduced Ford
ownership stake.

    OUTLOOK: Negative.
    Hertz's negative outlook reflects Standard & Poor's belief that Ford's
long-term strategy with respect to Hertz is uncertain. -- CreditWire

SOURCE  Standard & Poor's CreditWire