Hertz Corp. launched a single-seller ABCP conduit last week, backed by a variable funding note master trust structure - dubbed Hertz Vehicle Funding - which could conceivably be brought to the term ABS market down the line.

The conduit is authorized to fund up to $1 billion.

Via HVF, the company issues variable term notes into the Hertz Fleet Funding conduit. The variable-funding notes are secured by vehicles acquired for Hertz's rental car fleets. The term notes, which are backed by lease payments from Hertz Corp., are also enhanced by a letter of credit from JPMorgan Chase.

According to an analyst at Fitch Ratings, which rates the conduit F1', inserting the master trust structure between the seller and the issuance vehicle is becoming a popular innovation. In this way, Hertz would be able to access the term ABS market without establishing a new trust. Hertz is wholly owned by Ford Motor Co., whose finance subsidiary Ford Motor Credit, is one of the most active issuers in the securitization markets, on both the term and ABCP side.

Notably, over the past year, a few single-seller conduit wind-downs have occurred, most associated with a seller bankruptcy or significant credit migration, such as Providian's Master Trust Series 1998-3 (according to Moody's Investors Service). Notably, two of the bankruptcy-induced wind-downs have been from rental car c- MG

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