United Rentals Unit Announces $500M Debt Offering

GREENWICH, Conn. (AP) — United Rentals Inc. said Tuesday a subsidiary is selling about $500 million in 10.875 percent senior unsecured notes to institutional buyers, $200 million more than previously expected.

It said the proceeds will be used to retire outstanding debt and for other corporate purposes.

Also Tuesday, Moody's Investors Service affirmed United Rentals' corporate family and probability of default ratings at "B2," a non-investment grade rating. The outlook is negative.

Moody's said United Rental's geographic reach and array of rental equipment allow it to partially offset the construction downturn in its markets. But the ratings agency said its negative outlook is because United Rental's "financial performance will continue to be hindered by its leveraged capital structure and weak demand for rental equipment that is expected through mid-2010."

It assigned a B2 rating for the senior unsecured notes being offered by the company's United Rentals (North America) Inc. unit.

A spokesman for the Greenwich-based company declined to comment.

United Rentals' shares rose 19 cents, or 3.7 percent, to close at $5.34.