Moody's takes rating actions on 6 classes of Hertz-sponsored subordinate rental car ABS notes

New York, December 07, 2012 -- Moody's Investors Service announced today that, as a result of recent and expected future changes in the composition of the rental car fleet backing the notes, it has downgraded four classes of Class B subordinate rental car asset backed notes and placed on review for downgrade two additional classes of Class B subordinate rental car asset backed notes issued by Hertz Vehicle Financing LLC (the Issuer). The Issuer is a special purpose entity wholly owned by The Hertz Corporation (Hertz, B1/ Stable outlook).

The complete rating action is as follows:

Issuer: Hertz Vehicle Financing LLC, Series 2009-2

Series 2009-2 Class B-2, Downgraded to Baa1 (sf); previously on December 10, 2010 Upgraded to A1 (sf)

Issuer: Hertz Vehicle Financing LLC, Series 2010-1

Series 2010-1 Class B-1, Downgraded to Baa2 (sf); previously on December 10, 2010 Upgraded to A1 (sf)

Series 2010-1 Class B-2, Downgraded to Baa2 (sf); previously on December 10, 2010 Upgraded to A1 (sf)

Series 2010-1 Class B-3, Downgraded to Baa2 (sf); previously on December 10, 2010 Upgraded to A1 (sf)

Issuer: Hertz Vehicle Financing LLC, Series 2011-1

Series 2011-1 Class B-1, A3 (sf) Placed on Review for Downgrade; previously on January 12, 2012 Upgraded to A3 (sf)

Series 2011-1 Class B-2, A3 (sf) Placed on Review for Downgrade; previously on January 12, 2012 Upgraded to A3 (sf)

The Series 2011-1 Class B-1 and Class B-2 notes are placed on review for downgrade pending expected amendments that would alter the credit protections for the Class B-1 and Class B-2 notes.

The Series 2009-2 Class B-1 notes are unaffected due to their near-term maturity date in March 2013. Also, the Aaa (sf) ratings on the senior Class A notes from the Series listed above are unaffected by this action.

RATINGS RATIONALE

The rating actions are prompted by a significant shift in the mix of vehicles in the Issuer's daily rental car fleet, which collateralizes the Issuer's notes. Specifically, the car fleet mix has shifted with respect to two important credit characteristics and now has and is expected to have: (i) a lower proportion of "program" vehicles, i.e. vehicles that benefit from original equipment manufacturer (OEM)-guaranteed depreciation or repurchase agreements, and (ii) a lower proportion of vehicles from financially stronger OEMs. Both of these shifts are credit negative for the related notes. In addition, these recent shifts introduce a degree of variability to the fleet mix that had, until recently, been relatively stable, and Moody's has changed its expectations accordingly.

Firstly, the proportion of program vehicles in the collateral pool backing the transactions has decreased considerably over the past year, from 29% as of 31 January 2012 to 16% as of 31 October 2012. Moreover, Hertz has disclosed that the proportion of program vehicles in their fleet will move towards 10% in the future.

Secondly, Hertz is shifting the mix of OEM in its fleet, decreasing the proportion of financially stronger OEMs, like Toyota and Nissan (rated Aa3 and A3, respectively) while increasing the proportion of vehicles from financially weaker OEMs, such as Chrysler, Ford, and GM (rated B2, Baa3, and Ba1, respectively). This also represents a shift from vehicles with historically higher residual value retention towards vehicles with historically lower residual value retention. The financial strength of the OEMs and the residual value retention of their vehicles are drivers of credit quality in rental car ABS.

The ratings of the notes are based on, among other things, the credit quality of Hertz as the lessee, the liquidation values of the vehicles in the rental car fleet, the credit quality of automobile manufacturers providing vehicle disposition program agreements for program vehicles, the experience of Hertz as the servicer of the rental car fleet and the administrator for the Issuer, and the available credit support provided by a combination of overcollateralization, cash and/or Letters of Credit (LOCs).

The primary assets backing the notes are the monthly lease payments by Hertz as well as the pool of vehicles comprising the bulk of the Hertz daily rental car fleet.

The primary source of assumption uncertainty is the market value of vehicles in the fleet should fleet liquidation be necessary. To address this uncertainty, we make assumptions we believe to be conservative about appropriate recovery value haircuts.

PRINCIPAL RATING METHODOLOGY

The principal methodology used in these ratings "Moody's Approach to Rating Rental Car ABS and Rental Truck ABS," published in July 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Research & Ratings directory, in the Rating Methodologies sub-directory on www.moodys.com.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art. 4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com

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Gregory J. GemsonAsst Vice President - Analyst Structured Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Luisa De Gaetano VP - Senior Credit Officer Structured Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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