Summary
United Rentals, Inc. (URI) filed an 8-K on June 28, 2019, to report a material definitive agreement related to its securitization facility. The Company, through its subsidiaries URNA and the SPV, entered into an amendment to its existing Receivables Purchase Agreement and Purchase and Contribution Agreement. This amendment extends the expiration date of the facility to June 26, 2020, with the possibility of further 364-day extensions, providing continued access to funding. The amendment also involved assignments of rights and obligations among various financial institutions participating in the facility. From an investor's perspective, this filing indicates proactive management of the Company's financing arrangements. The extension of the securitization facility demonstrates ongoing confidence from its lenders and ensures continued liquidity for its operations. While advances under this facility are reflected as debt, the structure ensures receivables in the collateral pool are the sole source of repayment, a common feature in such arrangements. The filing also reiterates standard termination events and covenants, which investors should monitor.
Key Highlights
- 1Extension of securitization facility expiration date to June 26, 2020, with potential for further 364-day extensions.
- 2The amendment involves assignments of rights and obligations among multiple financial institutions, including The Bank of Nova Scotia, PNC Bank, SunTrust Bank, MUFG Bank, Ltd., Bank of Montreal, and The Toronto-Dominion Bank.
- 3Advances under the amended facility will continue to be reflected as debt on the consolidated balance sheets.
- 4Receivables in the collateral pool will continue to be reflected as assets and remain the sole source of repayment for lenders.
- 5The facility is subject to standard termination events, including change of control, payment defaults, and covenant breaches.
- 6The Company reaffirmed its performance undertaking related to the initial establishment of the securitization facility.