United Rentals to draw $166 million ABL loans to redeem 7 5/8% notes

By Susanna Moon

Chicago, Oct. 24 – United Rentals (North America), Inc. plans to draw $166 million under its ABL facility due June 8, 2021 to help fund a planned make-whole call for its $850 million 7 5/8% senior notes due 2022.

United Rentals expects to redeem the 7 5/8% notes with a carrying value of $839 million at a make-whole redemption price of 106.418% plus interest accrued to but excluding the redemption date, according to a 424B2 filing with the Securities and Exchange Commission.

The company plans to price $750 million of senior notes due 2027 and to use the proceeds from the offering and from the ABL facility borrowings to redeem the notes.

Pending the payment of the redemption prices for the 7 5/8% notes due 2022, proceeds from the offering will be used to pay down debt under the ABL facility. The company will then draw under the ABL facility to fund the redemption, the filing noted.

As of Sept. 30, on an as adjusted basis, the company had $1,913,000,000 outstanding under the ABL facility with a carrying value of $1,903,000,000.

Interest on loans under the ABL facility is 2%.

The ABL facility debt, which will be reduced with proceeds from the sale of the notes until it is drawn again for the redemption, were used for general corporate purposes, including working capital needs and the financing of share repurchases, the filing added.

United Rentals is a Stamford, Conn., equipment rental company.

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