Item 1.01
Entry into a Material Definitive Agreement.
$925,000,000 aggregate principal amount of 4.875% Senior Notes due 2028
On August 11, 2017, United Rentals (North America), Inc. (URNA) completed an offering of $925,000,000 aggregate principal amount of its 4.875% Senior Notes due 2028 (the Notes). The Notes were sold pursuant to United Rentals, Inc. (URI) and URNAs shelf registration statement on Form S-3 (File No. 333-201927) (the Registration Statement) previously filed with the Securities and Exchange Commission (the SEC) under the Securities Act as supplemented by the final prospectus supplement dated July 28, 2017 and filed with the SEC on July 31, 2017.
The Notes were issued pursuant to an indenture (the Indenture), dated as of August 11, 2017, among URNA, URI, certain domestic subsidiaries of URNA (the Subsidiary Guarantors and, together with URI, the Guarantors), and Wells Fargo Bank, National Association, as trustee.
The Notes mature on January 15, 2028 and bear interest at a rate of 4.875% per year payable semi-annually in cash in arrears on January 15 and July 15 of each year. The first such interest payment will be made on January 15, 2018.
The Notes are senior obligations of URNA and rank equally with all of its existing and future senior indebtedness, effectively junior to any of its existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and senior in right of payment to any of its existing and future subordinated indebtedness.
The Notes are guaranteed on a senior basis by the Guarantors. The guarantees are senior obligations of the Guarantors and rank equally with all of their existing and future senior indebtedness, effectively junior to any of their existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and senior in right of payment to any of their existing and future subordinated indebtedness. The Notes are not guaranteed by URNAs foreign subsidiaries or unrestricted subsidiaries.
URNA may redeem some or all of the Notes, at its option, at any time on or after January 15, 2023, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on January 15 of each of the years indicated below:
Year
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Redemption
Price
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2023
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102.438
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%
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2024
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101.625
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%
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2025
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100.813
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%
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2026 and thereafter
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100.000
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%
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At any time prior to January 15, 2023, URNA may redeem some or all of the Notes at a price equal to 100% of the aggregate principal amount of the Notes to be redeemed, plus a make-whole premium and accrued and unpaid interest, if any, to the redemption date. In addition, at any time on or prior to January 15, 2021, URNA may, at its option, on one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes with the net cash proceeds of certain equity offerings at a price equal to 104.875% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date. Upon the occurrence of certain change of control events, URNA must offer to repurchase the Notes at a price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date.
The Indenture governing the Notes contains certain covenants applicable to URNA and its restricted subsidiaries, including limitations on: (1) liens; (2) mergers, consolidations and sale of assets; and (3) dividends and other distributions, stock repurchases and redemptions and other restricted payments. The Indenture governing the Notes also contains requirements relating to additional subsidiary guarantors. Each of these covenants is subject to important exceptions and qualifications. In addition, the covenant relating to dividends and other distributions, stock repurchases and redemptions and other restricted payments and the requirements relating to additional subsidiary guarantors will not apply to URNA and its restricted subsidiaries during any period when the Notes are rated investment grade by both Standard & Poors Ratings Services and Moodys Investors Service, Inc., or, in certain circumstances, another rating agency selected by URNA, provided at such time no default under the Indenture has occurred and is continuing.
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The Indenture provides for customary events of default, including the following (subject to any applicable cure period): nonpayment, breach of covenants in the Indenture, payment defaults under or acceleration of certain other indebtedness, failure to discharge certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs or is continuing, the trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding may declare the principal of, premium, if any, and accrued and unpaid interest, if any, to be due and payable immediately.
The description above is qualified in its entirety by the Indenture (including the Form of Note for the Notes), which is filed as Exhibit 4.1 to this current report on Form 8-K and is incorporated by reference into this Item 1.01.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 8.01
Other Events.
Underwriting Agreement
In connection with the Notes offering, on July 28, 2017, URNA and the Guarantors entered into an underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several underwriters named therein, relating to the sale of the Notes (the Underwriting Agreement). A copy of the Underwriting Agreement is attached hereto as Exhibit 1.1, and is incorporated herein by reference.
Also in connection with the Notes offering, URI and URNA are filing an opinion of their outside counsel, Sullivan & Cromwell LLP, regarding the validity of the Notes as Exhibit 5.1 to this Form 8-K, which is incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits.
URI and URNA hereby incorporate Exhibits 1.1, 4.1, 5.1 and 23.1 into the Registration Statement.
Exhibits
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Exhibit 1.1
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Underwriting Agreement for the Notes, dated July 28, 2017, among URNA, URI, each of URNAs subsidiaries named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several Underwriters named therein.
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Exhibit 4.1
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Indenture for the Notes, dated as of August 11, 2017, among URNA, URI, each of URNAs subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee (including the Form of Note).
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Exhibit 5.1
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Opinion of Sullivan & Cromwell LLP relating to the Notes.
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Exhibit 23.1
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Consent of Sullivan & Cromwell LLP (included in Exhibit 5.1).
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