United Rentals prices $150 million six-year convertibles to yield 4%, up 25%

New York, Nov. 10 - United Rentals Inc. priced $150 million of six-year convertible senior notes after the close Tuesday to yield 4% with a 25% initial conversion premium.

The deal came within talk for a yield of 4% to 4.5% with a conversion premium of 22.5% to 27.5%.

The registered offering has a 15% greenshoe of $22.5 million.

United Rentals also priced an upsized $500 million of 9¼% straight notes due 2019 to yield 9½% in a separate registered public offering.

Bank of America Merrill Lynch, Morgan Stanley & Co. and Wells Fargo Securities are joint bookrunners for both offerings, with Bank of America acting as lead bookrunner of the convertibles deal. Co-managers are Barclays Capital Inc., Calyon Securities (USA) and Scotia Capital (USA) Inc.

The conversion ratio is 89.9888 and the conversion price is $11.11.

The convertibles have contingent conversion at a price trigger of 130% and are non-callable for life. They also have dividend and takeover protection.

Proceeds from the convertibles offering, together with cash on hand, will be used to redeem a portion of United Rentals' 14% senior notes due 2014.

The company will use cash on hand to pay the cost of the convertible note hedge transactions that raise the effective conversion premium to 75% from the company's perspective.

United Rentals is a Greenwich, Conn.-based equipment rental company.

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