United Rentals announced last week that it priced an offering of $125 million aggregate principal amount of 1 7/8 percent convertible senior subordinated notes due 2023. The company has granted the initial purchasers of the notes a 30-day option to purchase up to an additional $18.75 million aggregate principal amount of notes.
The notes will be convertible, under certain circumstances, into the company’s common stock at an initial conversion rate of 38.952 shares per $1,000 principal amount of notes. This is equivalent to a conversion price of approximately $25.67 per share..
The company plans to use the net proceeds of the convertible notes offering to buy out existing equipment leases and/or for general corporate purposes.
The company also announced that it expects to proceed with an additional offering of $525 million. The notes will bear interest at 7.75 percent and be due in 2013.
United expects to use about $424 million of the offering net proceeds to redeem $205 million face amount of outstanding 8.8 percent senior subordinated notes due 2008. The balance will be used to buy out existing equipment leases and/or for general corporate purposes. Completion of this offering is conditioned on the company obtaining an amendment to its senior credit facility allowing the planned redemption of outstanding notes.
Greenwich, Conn.-based United Rentals is No. 1 on the RER 100. Its stock closed at $xx.xx on the New York Stock Exchange Friday.
