United Rentals Announces Pricing of Offering of $750 Million of 3.750% Senior Notes due 2032

Rhea-AI Summary

United Rentals (NYSE: URI) has announced its subsidiary, URNA, priced $750 million of 3.750% Senior Notes due 2032 in a public offering. The net proceeds of approximately $743 million will be utilized to redeem $1 billion of its 5⅞% Senior Notes due 2026 and reduce borrowings under its ABL Facility. These notes rank equally with existing senior debts but are junior to secured debts. The offering is managed by leading financial institutions, including Morgan Stanley and BofA Securities.

Positive

• The offering of $750 million in Senior Notes strengthens URI's capital structure.
• Net proceeds of approximately $743 million will be used to redeem higher-interest debt.

Negative

• The need to redeem $1 billion in Senior Notes indicates ongoing debt management challenges.

United Rentals, Inc. (NYSE: URI) (“URI”) today announced that its subsidiary, United Rentals (North America), Inc. (“URNA”), has priced an offering of $750 million principal amount of 3.750% Senior Notes due 2032 (the “Notes”) in a registered public offering.

The Notes offered by URNA will rank:

• equally in right of payment with all of URNA’s existing and future senior indebtedness,
• effectively junior to any of URNA’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, and
• senior in right of payment to any of URNA’s existing and future subordinated indebtedness.

URNA’s obligations under the Notes will be guaranteed on a senior unsecured basis by URI and certain of URNA’s domestic subsidiaries.

Aggregate net proceeds from the sale of the Notes are expected to be approximately $743 million after underwriting discounts and commissions and payments of estimated fees and expenses. URNA expects to use the net proceeds from its offering of the Notes, together with borrowings of approximately $286 million under URNA’s senior secured asset-based revolving credit facility (the “ABL Facility”), to redeem all $1.0 billion principal amount of its 5⅞% Senior Notes due 2026 on or after September 15, 2021 at a redemption price of 102.938%, plus interest accrued to, but excluding, the date of redemption, and to pay related expenses. Pending the payment of the redemption price for the 5⅞% Senior Notes due 2026, the net proceeds from the offering of the Notes will be applied to reduce borrowings under the ABL Facility. URNA expects to then borrow under the ABL Facility to fund the redemption.

Morgan Stanley, BofA Securities, Wells Fargo Securities, Citigroup, Scotiabank, MUFG, Barclays, Deutsche Bank Securities and J.P. Morgan are the joint book-running managers for the offering, with Morgan Stanley serving as the lead book-running manager.

This news release shall not constitute a notice of redemption under the optional redemption provisions of the indenture governing URNA’s 5⅞% Senior Notes due 2026. This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the prospectus supplement or the shelf registration statement or prospectus.

URI and URNA have filed a registration statement (including a prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the preliminary prospectus supplement and prospectus in that registration statement and other documents URI and URNA have filed with the SEC for more complete information about them and this offering. You may get these documents for free by visiting EDGAR on the SEC’s website at http://www.sec.gov. Alternatively, copies of the preliminary prospectus supplement and accompanying prospectus for the offering may be obtained by contacting Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, by telephone at (866) 718-1649 or by email at prospectus@morganstanley.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. Forward-looking statements involve significant risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the business and future financial results of the equipment rental industries, and other legal, regulatory and economic developments. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe harbor provisions of the PSLRA. We give no assurance that it will achieve its expectations and does not assume any responsibility for the accuracy and completeness of the forward- looking statements.

You should carefully consider risks and uncertainties that affect our businesses described in the “Risk Factors” section of the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. All forward-looking statements included in this document are based upon information available to URI on the date hereof; and URI assumes no obligations to update or revise any such forward-looking statements.

About United Rentals

United Rentals, Inc. is the largest equipment rental company in the world. The company has an integrated network of 1,275 rental locations in North America, 11 in Europe, 28 in Australia and 18 in New Zealand. In North America, the company operates in 49 states and every Canadian province. The company’s approximately 19,900 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers approximately 4,200 classes of equipment for rent with a total original cost of $15.06 billion. United Rentals is a member of the Standard & Poor’s 500 Index, the Barron’s 400 Index and the Russell 3000 Index® and is headquartered in Stamford, Conn.

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FAQ

What is the purpose of United Rentals' recent $750 million Senior Notes offering?

The proceeds will be used to redeem existing higher-interest debt and reduce borrowings.

When will the Senior Notes due 2032 mature?

The Senior Notes will mature in 2032.

What is the interest rate on the new Senior Notes issued by URI?

The new Senior Notes have an interest rate of 3.750%.

Who are the joint book-running managers for URI's Senior Notes offering?

Morgan Stanley, BofA Securities, Wells Fargo Securities, Citigroup, and several others.