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Standard & Poor's Affirms Ratings on Hertz Corp.

17 June 1998

Standard & Poor's Affirms Ratings on Hertz Corp.; Outlook to Developing

    NEW YORK, June 16 -- Standard & Poor's today affirmed its
ratings on Hertz Corp (see list below).  The outlook is revised to developing
from negative.
    Ford Motor Co. (single-'A'/stable/'A-1') currently owns 81.5% of Hertz.
Ford's majority stake and Hertz's strategic importance as Ford's largest
customer are reflected in the triple-'B'-plus corporate credit rating on
Hertz.  Both Hertz's financial profile and the business profile of the car
rental industry, in which Hertz is the largest participant, have improved
since 1996.  If this trend were to continue and Ford continues to maintain a
substantial ownership stake in Hertz, Hertz's ratings could be raised.
Alternatively, if Ford were to significantly reduce its ownership stake in
Hertz, Hertz's corporate credit rating would likely be lowered to triple-'B'.
Approximately $3.4 billion of rated debt is affected.
    Hertz participates primarily in the business and leisure rental segments
of the car rental business.  In the past, this segment has been fiercely
price-competitive, typically producing poor margins or even losses for all
participants, even during healthy economic periods.  However, the industry has
enjoyed record profitability since ownership of all major participants in this
sector shifted from car manufacturers, which began in late 1996.  While car
manufacturers viewed car rental operations primarily as captive customers, the
new owners are all wholly or partially publicly held companies, are more
focused on profitability, and are less inclined to expand their fleets in a
bid to gain market share -- resulting in higher utilization rates, and prices.
Through its Hertz Equipment Rental Corp. subsidiary, Hertz currently operates
the largest industrial and construction equipment rental business in the U.S.
In 1997, Hertz's earnings reached a record level and all its credit ratios
showed improvement. Hertz's debt to capital declined to 81.9% from 84.8% in
1996, still somewhat high for a transportation equipment lessor, although
management has indicated its target is 75% for this ratio.  Hertz's financial
profile is expected to show further improvement in 1998 due to continued
strong earnings and cash flow.  Hertz has strong financial flexibility, due in
large part to the highly liquid nature of its assets, an advantage that would
continue, even with a reduced Ford stake.

    OUTLOOK:  DEVELOPING
    Hertz's ratings could be raised if its financial profile continues to
improve and Ford continues to hold a substantial ownership stake in the
company.  However, Hertz's ratings could be lowered if Ford were to reduce its
ownership stake substantially. -- CreditWire

    OUTSTANDING RATINGS AFFIRMED

    Hertz Corp.
    Rating
    Corporate credit rating            BBB+
    Senior unsecured debt rating       BBB+
    Subordinated debt rating           BBB
    Commercial paper rating            A-2