United Rentals agrees to improve terms of consent solicitations with ad hoc committees

By Jennifer Chiou

New York, Sept. 12 - United Rentals, Inc. said it reached an agreement in principle with the ad hoc committees representing several issues of its notes on improved terms to the consent solicitations for the notes and Quarterly Income Preferred Securities (QUIPs).

Affected securities include United Rentals' 6½% senior notes due 2012, 7¾% senior subordinated notes due 2013, 7% senior subordinated notes due 2014, 1.875% convertible senior subordinated notes due 2023 and 6.5% convertible QUIPs.

The company said the ad hoc committee representing the 6½%, 7¾% and 7% notes is made up of 60 financial institutions holding more than $1.4 billion or 50% of the three issues. The ad hoc group of 1.875% noteholders is comprised of holders owning more than 50% of the outstanding amount of convertibles.

The company also said it has again extended its consent solicitations to amend the indentures governing its securities to allow the company additional time to make filings with the Securities and Exchange Commission. The expiration is now 5 p.m. ET on Sept. 19 instead of 5 p.m. ET on Sept. 9.

As announced on Aug. 22, United Rentals is soliciting the consents because it has delayed filing its 10-K for 2004 and 10-Qs for the first two quarters of 2005.

The proposal allows the company until March 31, 2006 to file its reports and waive related past violations.

For the 6½%, 7¾% and 7% notes, United Rentals said it will pay a consent fee of $16.25 per $1,000 principal amount of notes.

For the QUIPs, the company will pay a consent fee of $0.8125 per $50.00 of liquidation preference.

For the 1 7/8% convertibles, the conversion rate will be increased to 44.9438 shares from 38.9520 shares of United Rentals' stock for each $1,000 principal amount of notes.

Previously, United Rentals said it would pay a consent fee of $2.50 for each $1,000 principal amount of notes - including the convertibles - and $0.125 for each $50 liquidation preference of QUIPs.

"We are pleased to have reached this understanding with representatives of the various bondholder groups," chief executive officer Wayland Hicks said in a news release.

"We continue to focus on resolving expeditiously issues associated with the SEC inquiry and driving strong operating performance."

The company also said it will provide 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.

The company must attain consents from a majority of noteholders for approval of proposed amendments.

Credit Suisse First Boston is solicitation agent and MacKenzie Partners (800 322-2885 or call collect 212 929-5500) is information agent.

Based in Greenwich, Conn., United Rentals is the largest equipment rental company in the world.

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