Shares of debt-laden car rental company Hertz (HTZ) are on the downside again after the company priced its new debt offering last night.

DEBT OFFERING: The company's $1.25B private offering of senior second priority secured notes priced at a yield of 7.625%. The company issued the debt to pay down existing bonds due in 2018 and 2019 that are costing the company 4.25% and 6.75%, respectively. In an article out this morning, The Financial Times noted that corporate bonds with similar credit ratings traded with a yield of 4.62% on Tuesday, according to Bank of America Merrill Lynch.

BATTERED BALANCE SHEET: Hertz, which has seen its shares lose around 75% of their value over the past 12 months, has seen its borrowing costs increase amid a difficult environment for car rental companies, including rival Avis (CAR). As the U.S auto industry has reached peak sales and is beginning to cool, the amount of used cars coming off leases initiated during the glory days is enormous. Used car prices have been declining for the better part of 2017 and car rental companies like Hertz and Avis have suffered as the resale value of their fleets are under pressure. In early May, Morgan Stanley analyst Adam Jonas, in a note to investors, pointed out Hertz's increasingly fragile balance sheet and "unprecedented" dynamics within the car rental space. At this point, said Jonas, the performance of Hertz shares could hinge on the company's access to capital markets: "Specifically, its ability to continue to fund its car rental operations while terming out significant debt maturities that escalate each year in 2018, 2019 and 2020." The analyst added that Hertz is now leveraged to "elevated levels," and its financing situation is the primary risk facing investors. Moody's also weighed in on Hertz's debt in early May by downgrading the company's credit rating to B2, pushing it into a riskier territory. At the time, Moody's noted that the lowered ratings at the B2 CFR reflect both the near term challenges the company faces as a result of declining residual values and weak pricing, and also the longer term risks associated with implementing its turnaround plan.

PRICE ACTION: Shares of Hertz are off their intraday low, down 3.2%, to $9.88, while Avis is down fractionally to $22.80 in afternoon trading.