United Rentals prices tenders for 6½%, 7¾%, 7% notes, gets needed consents

By Angela McDaniels

Seattle, Oct. 30 - United Rentals, Inc. announced the tender considerations to be paid in connection with subsidiary United Rentals (North America), Inc.'s offer to buy back its $1 billion 6½% senior notes due 2012, $525 million 7¾% senior subordinated notes due 2013 and $375 million 7% senior subordinated notes due 2014.

For each $1,000 principal amount, the payout will be $1,036.83 for the 6½% notes, $1,069.02 for the 7¾% notes and $1,064.30 for the 7% notes. Noteholders also will receive accrued interest up to but excluding the settlement date, which is expected to be Nov. 14.

The payouts include a consent fee of $30.00 per $1,000 principal amount of notes tendered by the consent deadline.

The payouts were determined on Oct. 29 based on the yield to the first redemption date of the notes equal to 50 basis points over a yield calculated using a reference U.S. Treasury note.

The tender offers began on Oct. 16 and will expire at midnight ET on Nov. 13. The consent deadline was 5 p.m. ET on Oct. 29.

The company said that, as of the consent deadline, it had received tenders and consents from holders of $998 million, or 99.8%, of the 6½% notes, from holders of $517 million, or 98.4%, of the 7¾% notes and from holders of $371 million, or 99%, of the 7% notes.

The consents will allow United Rentals (North America) to eliminate substantially all of the restrictive covenants and some events of default in the note indentures. The supplemental indenture containing the amendments is expected to be executed shortly, and the amendments will become operative once the company accepts the tendered notes.

The tender offers and consent solicitations are being held in connection with the planned merger of RAM Acquisition Corp., an affiliate of Cerberus Capital Management, LP, with and into United Rentals.

The closing of the tender offers is subject to the company securing up to $2.5 billion of new credit facilities, the receipt of up to $4 billion of additional debt financing, the consummation of the merger and the receipt of consents from holders of a majority of each series of notes.

Closing of the merger is not dependent on any debt financing condition or the closing of the tender offers, according to a company news release.

Credit Suisse Securities (USA) LLC (212 325-4951), Banc of America Securities LLC (888 292-0070 or 704 388-9217), Morgan Stanley & Co. Inc. (800 624-1808 or 212 761-1864) and Lehman Brothers Inc. (800 438-3242 or 212 528-7581) are the dealer managers and solicitation agents. D.F. King & Co., Inc. (800 488-8095 or 212 269-5550) is the information agent.

United Rentals is an equipment rental company based in Greenwich, Conn.

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