United Rentals ups payment in tender offers for 6½%, 7¾%, 7% notes

By Angela McDaniels

Tacoma, Wash., Nov. 26 - United Rentals, Inc. said it increased the amounts it will pay under 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 settlement date was pushed back to Dec. 10 and, as a result, the payout for each $1,000 principal amount will be $1,037.30 for the 6½% notes, $1,074.25 for the 7¾% notes and $1,071.93 for the 7% notes.

Noteholders will also receive accrued interest up to but excluding the settlement date.

Previously, noteholders were slated to receive $1,036.83 for the 6½% notes, $1,069.02 for the 7¾% notes and $1,064.30 for the 7% notes.

The payouts still 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 initially 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 tender offers will expire at midnight ET on Dec. 7. The deadline was originally set for Nov. 16 and was extended to Nov. 13 and to Nov. 21.

The offers began on Oct. 16. The deadline for a concurrent consent solicitation was 5 p.m. ET on Oct. 29.

United Rentals said the latest extension was needed so it can fulfill its obligations under its merger agreement with affiliates of Cerberus Capital Management, LP.

On Nov. 14, Cerberus announced it was not prepared to move forward with its planned $7 billion acquisition of the company. United Rentals then filed suit against Cerberus and its affiliates, seeking to compel them to complete the acquisition as planned.

As of midnight ET on Nov. 21, the company had received tenders and consents for $998.5 million, or 99.9%, of the 6½% notes, for $517.9 million, or 98.7%, of the 7¾% notes and for $371.7 million, or 99.1%, of the 7% notes.

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 amendments will become operative once the company accepts the tendered notes.

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.

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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