Dollar Thrifty gains fleet financing flexibility

Dollar Thrifty Automotive Group has gained flexibility in the financing of its fleet relative to it reducing a credit facility, as the rental car operator works through the impact of the current financial crisis.

The rental car company gains flexibility in purchasing cars at favorable pricing and at the same time it is able to reduce its credit exposure to vehicle manufacturer residual-value guarantees.

With approvals from insurers and rating agencies, Dollar Thrifty is no longer required to maintain a percentage of its vehicle inventory value under repurchase or depreciation programs.

This approval comes a day after Ford Motor Co. posted a 90 percent drop in January sales to rental car companies and General Motors Corp. reported a fall of 80 percent in fleet sales – down to 13,000, which is the lowest level seen since 1975. Rental car companies represent a significant portion of fleet sales, and are reducing fleet purchases as rental demand falls.

Dollar Thrifty reduced the size of its letter of credit commitment and total revolving loan to $290 million, as the group attempts to scale back its business in line with current economic realities.

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