United Rentals again prolongs tenders for 6½%, 7¾%, 7% notes

By Laura Lutz

Des Moines, Nov. 16 - United Rentals, Inc. announced another extension of subsidiary United Rentals (North America), Inc.'s tender offers for 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.

The tender offers will now expire at midnight ET on Nov. 21. They were previously set to expire on Nov. 13 and Nov. 16.

The offers began on Oct. 16. The consent deadline was 5 p.m. ET on Oct. 29.

"The extension of these tender offers demonstrates that United Rentals continues to fulfill all of its obligations under the merger agreement with Cerberus," United Rentals said in a press release. "As the company previously announced, United Rentals stands ready to complete the merger transaction on the agreed-upon terms even as it continues to consider all possible remedies in light of Cerberus' repudiation of the transaction."

As of 5 p.m. ET on Nov. 13, United Rentals had received tenders for about $998.49 million, or 99.9%, of the 6½% notes; about $517.77 million, or 98.6%, of the 7¾% notes; and about $371.72 million, or 99.1%, of the 7% notes.

Those amounts are up from 99.8% of the 6½% notes, 98.4% of the 7¾% notes and 99% of the 7% notes that the company had received as of the consent deadline.

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. Notes tendered after that deadline will not receive the consent payment.

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 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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