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S&P keeps United Rentals on negative watch
Standard & Poor's said that its ratings on United Rentals (North America) Inc. and on its parent company, United Rentals Inc., remain on CreditWatch with negative implications.
S&P currently rates United Rentals (North America) Inc.'s senior secured bank loan at BB, senior unsecured debt at BB- and senior subordinated debt at B+ as well as United Rentals Inc. preferred stock at B.
The ratings remain on CreditWatch following the company's announcement that the company has received necessary consents from bondholders to amend indentures governing each issue of its outstanding bonds and quarterly income preferred securities (Quips). Receipt of the consents from a majority of bondholders allows United Rentals (North America) more time to file its financial reports and is considered a positive development, as the delay could have led to a default under the indenture if the company received a notice from the trustees or from 25% of the holders of any of its bonds.
The consents eliminate the possibility of a default notice by permitting the delay of filing to the SEC until March 31, 2006. Filings have been delayed since the original notice of an investigation by the SEC was received in August 2004.
The company also has a waiver extension from the senior lenders under its credit facility to Dec. 31, 2005. Receipt of consents from bondholders also temporarily eliminates the possibility of a cross default. In that case, the company would have had to seek further waivers from its banks.
Separately, the company announced that it has hired a new interim CFO after the previous one was terminated for not cooperating with the investigation.
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