15.11.2009

United issues public offering

United Rentals, the world’s largest rental company, issued two public offerings last week for a total of $650 million in senior unsecured notes.

The first was for $150 million in four percent convertible senior unsecured notes due 2015. The second offering was for $500 million of 9.25 percent senior unsecured notes due 2019.

The second offering was increased from an originally announced $400 million offering, based on better than anticipated demand. A further $22.5 million will be allowed if necessary to cover oversubscriptions.

Net proceeds from the two offerings, after underwriting discounts and commissions, but before fees and expenses, will be around $627 million or $648 million if the over-allotment option is exercised in full.

The convertible senior notes will be convertible at an initial conversion rate at about 25 percent conversion premium over the $8.89 closing price of United Rentals’ share price on November 10th.

United says that it intends to use the proceeds together with cash on hand, to redeem a portion of its 14 percent Senior Notes due 2014 and other more expensive or shorter term debt.