Summary
United Rentals, Inc. (URI) announced on May 7, 2008, a significant move to strengthen its financial flexibility by entering into a $1 billion asset-based revolving credit facility (the "Facility"). This new facility is intended to replace existing credit arrangements, including a cash flow revolver, a letter of credit facility, and a term loan, some of which were maturing in early 2009. The primary purpose of this new Facility is to provide United Rentals (North America), Inc. (URNA) and its subsidiaries with enhanced working capital and funds for other general corporate needs. The new credit facility will be secured by most of the company's assets, excluding real property and accounts receivable. Notably, URNA's existing $300 million accounts receivable-backed facility will continue to operate independently. The company is in the process of syndicating this new facility to other lenders, with the expectation of finalizing and drawing upon the credit agreement in June 2008.
Key Highlights
- 1United Rentals, Inc. entered into a $1 billion asset-based revolving credit facility.
- 2The new facility is intended to refinance existing credit lines and term loans.
- 3Funds from the facility will be used for working capital and general corporate purposes.
- 4The facility is secured by substantially all company assets, excluding real property and accounts receivable.
- 5URNA's existing $300 million accounts receivable-backed facility will remain in place.
- 6The company is syndicating the new facility to additional lenders.
- 7The definitive credit agreement is expected to be executed and drawn upon in June 2008.