United Rentals to price $1.375 billion in two tranches on Friday

By Paul A. Harris

St. Louis, Jan. 22 - United Rentals Inc. plans to sell a combined $1.375 billion in two tranches of high-yield bonds on Friday, a syndicate source said.

The Greenwich, Conn.-based equipment rental company is offering $1 billion of senior notes due 2012 (expected ratings B1/BB-) that will be non-callable for four years. Price talk is 6 3/8% to 6½%.

The company is also offering $375 million of senior subordinated notes due 2014 (expected ratings B2/B+) that will be non-callable for five years. Price talk is 7% to 7 1/8%.

Credit Suisse First Boston, Banc of America Securities, Citigroup and JP Morgan are joint bookrunners on the Rule 144A offerings, which will have registration rights. Co-managers are expected to emerge.

Proceeds, along with the company's new credit facility, will be used to repay bank debt, redeem $300 million of 9¼% senior subordinated notes due 2009 and $250 million of 9% senior subordinated notes due 2009, and to repurchase up to $860 million of 10¾% senior notes due 2008.

Closing of the new senior notes offering, but not the senior subordinated notes offering, is conditioned on the company obtaining the new credit facility and completing its tender for at least $516 million of outstanding 10¾% senior notes due 2008.

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