United Rentals, Inc. (NYSE: URI) (“URI”) today announced that it
is offering $150 million ($172.5 million if the underwriters’
over-allotment option is exercised in full) principal amount of
convertible senior unsecured notes due 2015, and its subsidiary,
United Rentals (North America), Inc. (“URNA”) is offering $400
million principal amount of senior unsecured notes due 2019 in
separate registered public offerings.
The convertible senior notes offered by URI will rank equally
with all of its existing and future unsecured senior debt and
effectively junior to any existing and future debt of URNA and its
subsidiaries as well as to URI’s secured obligations, composed of
its guarantee obligations in respect of URNA’s and its
subsidiaries’ outstanding borrowings under its senior secured
asset-based revolving credit facility (the “ABL facility”) to the
extent of the value of the collateral securing such guarantee
obligations. The senior notes offered by URNA will rank equally
with its existing and future unsecured senior debt, effectively
junior to any secured debt to the extent of the value of the
collateral securing such debt, including its borrowings under the
ABL facility, and effectively junior to the liabilities of its
non-guarantor subsidiaries. URNA’s obligations under these notes
will be guaranteed on a senior basis by URI and certain of URNA’s
domestic subsidiaries.
URI intends to use the net proceeds from its convertible senior
notes offering, together with cash on hand, to redeem a portion of
its 14% Senior Notes due 2014 and will use cash on hand to pay the
cost of the convertible note hedge transactions that it intends to
enter into in connection with the sale of the convertible senior
notes, as described below. URNA intends to use the net proceeds
from its senior notes offering to purchase or retire outstanding
senior unsecured indebtedness, pay or prepay outstanding borrowings
under its ABL facility and for general corporate purposes. The
completion of either offering will not be contingent upon the
completion of the other.
In connection with the convertible senior notes offering, URI
intends to enter into convertible note hedge transactions with one
or more counterparties, referred to as the option counterparties,
which may include one or more of the underwriters or their
affiliates. The convertible note hedge transactions are intended to
reduce, subject to a limit, the potential dilution with respect to
URI’s common stock upon conversion of the convertible senior notes.
However, in the event the market value of URI’s common stock
exceeds a cap specified in the convertible note hedge transactions,
the settlement amount received from such transactions will be
reduced, and therefore, the reduction in potential dilution will be
limited. Each convertible note hedge transaction is a separate
hedge transaction entered into by URI with an option
counterparty.
In connection with establishing their initial hedge of these
transactions, the option counterparties have informed URI that they
expect to enter into various derivative transactions with respect
to URI's common stock concurrently with or shortly after the
pricing of the convertible senior notes. In addition, the option
counterparties have informed URI that they are likely to modify
their hedge positions by entering into or unwinding various
derivative transactions with respect to URI's common stock and/or
by purchasing or selling shares of URI's common stock or other of
URI's securities (including the convertible senior notes) in
secondary market transactions during the term of the convertible
senior notes and prior to the maturity of the convertible senior
notes (and are likely to do so during any observation period
related to a conversion of convertible senior notes). This activity
could also cause or avoid an increase or a decrease in the market
price of URI's common stock or the convertible senior notes, which
could affect a noteholder's ability to convert the convertible
senior notes and, to the extent the activity occurs during any
observation period related to a conversion of convertible senior
notes, it could affect the number of shares and value of the
consideration that a noteholder will receive upon conversion of the
convertible senior notes.
If the underwriters exercise their overallotment option to
purchase additional convertible senior notes, URI expects to enter
into additional convertible note hedge transactions.
BofA Merrill Lynch, Wells Fargo Securities and Morgan Stanley
are the joint book-running managers for both offerings, with BofA
Merrill Lynch as lead book-running manager for the URI convertible
senior notes offering and Wells Fargo Securities as lead
book-running manager for the URNA senior notes offering.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of any
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
The securities being offered have not been approved or disapproved
by any regulatory authority, nor has any such authority passed upon
the accuracy or adequacy of the prospectus supplements or the shelf
registration statement or prospectus.
URI has filed a registration statement (including a prospectus
and a related preliminary prospectus supplement) with the U.S.
Securities and Exchange Commission (SEC) for the offerings to which
this communication relates. Before you invest, you should read the
prospectus supplement and prospectus in that registration statement
and other documents URI has filed with the SEC for more complete
information about URI and these offerings. You may get these
documents for free by visiting EDGAR on the SEC’s website at
http://www.sec.gov. Alternatively, copies of the preliminary
prospectus supplement and accompanying prospectus for the URI
convertible senior notes offering may be obtained by
contacting:
BofA Merrill Lynch, 4 World Financial Center, New York, NY
10080, Attn: Preliminary Prospectus Department, 866-500-5408 or via
email at prospectus.requests@ml.com,
Morgan Stanley, 180 Varick Street, 2nd Floor, New York, NY
10014, Attn: Prospectus Department, 866-718-1649 or via email at
prospectus@morganstanley.com,
Wells Fargo Securities, 375 Park Avenue, New York, NY 10152,
Attn: Equity Syndicate Department, 800-326-5897 or via email at
equity.syndicate@wachovia.com.
Copies of the preliminary prospectus supplement and accompanying
prospectus for the URNA senior notes offering may be obtained by
contacting:
Wells Fargo Securities, 301 South College Street, 6th Floor,
Charlotte, NC 28202, Attn: High Yield Syndicate, (704)
715-7035,
BofA Merrill Lynch, 100 West 33rd Street, 3rd Floor, New York,
NY 10001, Attn: Prospectus Department, 800-294-1322 or via email at
dg.prospectus_distribution@bofasecurities.com,
Morgan Stanley, 180 Varick Street, 2nd Floor, New York, NY
10014, Attn: Prospectus Department, 866-718-1649 or via email at
prospectus@morganstanley.com.
About United
Rentals
United Rentals, Inc. is the largest equipment rental company in
the world, with an integrated network of 580 rental locations in 48
states, 10 Canadian provinces and Mexico. The company’s
approximately 8,400 employees serve construction and industrial
customers, utilities, municipalities, homeowners and others. The
company offers for rent approximately 3,000 classes of equipment
with a total original cost of $3.8 billion. United Rentals is a
member of the Standard & Poor’s MidCap 400 Index and the
Russell 2000 Index® and is headquartered in Greenwich, Conn.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements can be identified by
the use of forward-looking terminology such as “believe,” “expect,”
“may,” “will,” “should,” “seek,” “on-track,” “plan,” “project,”
“forecast,” “intend” or “anticipate,” or the negative thereof or
comparable terminology, or by discussions of strategy or outlook.
You are cautioned that our business and operations are subject to a
variety of risks and uncertainties, many of which are beyond our
control, and, consequently, our actual results may differ
materially from those projected. Factors that could cause actual
results to differ materially from those projected include, but are
not limited to, the following: (1) on-going decreases in North
American construction and industrial activities, which have
significantly affected revenues and, because many of our costs are
fixed, our profitability, and which may further reduce demand and
prices for our products and services; (2) our highly leveraged
capital structure, which requires us to use a substantial portion
of our cash flow for debt service and can constrain our flexibility
in responding to unanticipated or adverse business conditions; (3)
noncompliance with financial or other covenants in our debt
agreements, which could result in our lenders terminating our
credit facilities and requiring us to repay outstanding borrowings;
(4) inability to access the capital that our businesses or growth
plans may require; (5) increases in our maintenance and replacement
costs as we age our fleet, and decreases in the residual value of
our equipment; (6) inability to sell our new or used fleet in the
amounts, or at the prices, we expect; (7) rates we can charge and
time utilization we can achieve being less than anticipated; and
(8) costs we incur being more than anticipated, and the inability
to realize expected savings in the amounts or time frames planned.
For a fuller description of these and other possible uncertainties,
please refer to our Annual Report on Form 10-K for the year ended
December 31, 2008, as well as to our subsequent filings with the
SEC. Our forward-looking statements contained herein speak only as
of the date hereof, and we make no commitment to update or publicly
release any revisions to forward-looking statements in order to
reflect new information or subsequent events, circumstances or
changes in expectations.
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