United Rentals Reaches Agreement in Principle With Bondholders

Sept. 19, 2005
United Rentals last week announced an agreement in principle with the steering committee of an ad hoc committee representing holders of the company’s nonconvertible and convertible notes on improved terms to the consent solicitations relating to the ...

United Rentals last week announced an agreement in principle with the steering committee of an ad hoc committee representing holders of the company’s nonconvertible and convertible notes on improved terms to the consent solicitations relating to the company’s outstanding notes and QUIPs securities.

United has been advised that the ad hoc committee representing the noncovertible noteholders consists of about 60 financial institutions that collectively hold an aggregate of more than $1.4 billion of the three issues of the nonconvertible notes and more that 50 percent of the principal amount of each issue of those notes. The representatives of the ad hoc group of convertible noteholders have advised the company that the members of their group collectively own more than 50 percent of the outstanding principal amount of the convertible notes.

The proposed amendments would, among other things, allow United up until March 31, 2006, to regain compliance with the requirement to make timely SEC filings.

United is improving the terms of its offers to holders by agreeing to pay a consent fee of $16.25 per $1,000 principal amount of the 6 ½ percent senior notes due 2012, 7 ¾ percent senior subordinated notes due 2013 and 7 percent senior subordinated notes due 2014. For the QUIPs securities, United will pay a comparable consent fee of $0.8125 per $50 of liquidation preference. And for the company’s 1 7/8 percent convertible senior subordinated notes due 2023, the conversion rate of the convertible notes be will increased from 38.95 to 44.94 shares of United Rentals common stock for each $1,000 principal amount of convertible notes.

United also agreed to provide certain items of unaudited interim operating financial information on a monthly and quarterly basis during the term of the waiver, including revenues, capital expenditures, cash flow from operations, liquidity and outstanding debt.

Approval of the proposed amendments and waiver will require the consent of holders of a majority of the principal amount of each issue.

United is extending the expiration date for the consent solicitations to 5 p.m. EST September 19.