U.S. Markets open in 4 hrs 10 mins

United Rentals to Redeem Senior Notes

Zacks Equity Research

United Rentals, Inc. (URI), the provider of rental and leasing services, recently announced that its subsidiary, United Rentals (North America), Inc. (URNAF), will redeem its Senior Notes due 2019 with a coupon rate of 10.25%. The principal amount of the notes aggregate $200 million.

The company notified the holders that the redemption will take place on Jan 21, 2014. The redemption price of the Notes will equal 112.916% of the principal amount of the Notes plus accrued and unpaid interest up to the date of the redemption.

Wells Fargo Bank, National Association; a subsidiary of Wells Fargo & Company (WFC); worked as the trustee for the Notes.  URNA expects to use borrowings of around $226 million under its asset-based revolving credit facility to redeem the principal amount of the Notes. The amount under this facility rose by $400 million on Dec 19, 2013, resulting in an available combined amount of $2,300 million.

United Rentals reported third-quarter 2013 adjusted earnings of $1.63 per share, up 20.7% from the prior-year quarter. Adjusted earnings before interest, taxes, depreciation and amortization (:EBITDA) in the quarter improved 13% year over year to $642 million.

Time utilization for United Rentals increased 100 basis points year over year to 70.8%. The company also realized cost synergies of $64 million in the quarter from the RSC integration.

United Rentals reiterated its adjusted EBITDA guidance for full-year 2013 in the range of $2.25 billion–$2.35 billion. The company also reaffirmed its outlook for time utilization of around 68.0%. In addition, the projected cost synergies on a run-rate basis have been retained in the band of $230 million-$250 million.

Greenwich, CT-based United Rentals is the largest equipment rental company in the world, with an integrated network of 822 rentals. The company offers about 3,200 classes of equipment with a total original cost of $7.96 billion, for rent.

United Rentals currently has a Zacks Rank #2 (Buy). Other favorably-ranked stocks in the same industry include CaesarStone Sdot-Yam Ltd. (CSTE) and James Hardie Industries plc (JHX) with a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on URI
Read the Full Research Report on CSTE
Read the Full Research Report on WFC
Read the Full Research Report on JHX

Zacks Investment Research