01—Abstract
Summary
Summary of the 8-K filed February 21, 2012. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) filed an 8-K on February 21, 2012, primarily disclosing details surrounding its planned acquisition of RSC Holdings, Inc. and related financing activities.
The company announced its subsidiary, UR Financing Escrow Corporation, is offering $1.55 billiona in senior unsecured notes and $650 million in senior secured notes to qualified institutional buyers. This offering is part of the financing strategy for the RSC Holdings merger. Furthermore, the filing provides updates on the company's credit facilities.
United Rentals (North America) is requesting a $100 millionb commitment increase to its asset-backed loan (ABL) facility, expected to be effective March 5, 2012. Post-merger, further increases to the ABL facility and accounts receivable securitization facility are anticipated, totaling an additional $250-$300 million in financing capacity. The report also touches on fleet age, noting a combined fleet age of approximately 48 months post-merger under a new calculation standard.
02—Key points
Key Highlights
- UR Financing Escrow Corporation is offering $1.55 billion in senior unsecured notes and $650 million in senior secured notes.
- The note offering is intended to help finance the acquisition of RSC Holdings, Inc.
- United Rentals (North America) is seeking a $100 million commitment increase to its asset-backed loan (ABL) facility, effective March 5, 2012.
- Post-merger with RSC Holdings, the company expects to further increase ABL facility commitments by $100 million to $150 million.
- An additional $100 million increase is expected for the accounts receivable securitization facility post-merger.
- The combined company's fleet age was approximately 48 months at December 31, 2011, using a new cost-weighted calculation method.
- Approximately 95% of the combined fleet was current on manufacturer-recommended maintenance as of December 31, 2011.
03—Questions
Frequently Asked Questions
What is the primary purpose of the debt offering mentioned in the filing?
The primary purpose of the debt offering is to raise capital to finance the proposed acquisition of RSC Holdings, Inc. United Rentals is offering senior unsecured notes and senior secured notes to qualified institutional buyers.
What are the expected changes to United Rentals' credit facilities following the RSC Holdings merger?
Following the merger, United Rentals expects to increase commitments under its ABL Facility by an additional $100 million to $150 million and increase commitments under its accounts receivable securitization facility by $100 million. Additionally, a $100 million commitment increase to the ABL Facility is expected prior to the merger's consummation.
How is the company calculating its fleet age, and what is the combined fleet age?
Effective January 1, 2012, United Rentals began using a new standard to calculate fleet age on an original equipment cost-weighted basis. Using this new standard, the combined company's fleet age was approximately 48 months at December 31, 2011. For comparison, RSC's fleet age was approximately 42 months on a historic basis.
Are the new notes registered with the SEC?
No, the notes offered have not been registered under the Securities Act of 1933 or the securities laws of any other jurisdiction. They are being offered to qualified institutional buyers in accordance with Rule 144A and outside the United States in accordance with Regulation S, which are exemptions from registration.
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