$1.5 Billion Credit Facility Supports Merger of Rental Service Corp. and NationsRent

Strategic Insights -

The merger of Rental Service Corp. and NationsRent, a $1.5 billion credit facility has been launched in the market, supporting the combined entity, RSC NationsRent. The facility features a five-year $1.1 billion revolving credit and a seven-year $400 million B-term loan, underwritten by BT, BankAmerica, Merrill, and BankBoston. The facility has garnered interest from several major banks, with Credit Lyonnais and Bank One signing on as senior managing agents, while Fleet Bank and Bank of Nova Scotia have committed as co-agents.

Key Takeaways:

  • The credit facility, worth $1.5 billion, will support the merger of Rental Service Corp. and NationsRent, creating a new entity called RSC NationsRent.
  • The facility consists of a five-year $1.1 billion revolving credit and a seven-year $400 million B-term loan.
  • The underwriting banks are BT, BankAmerica, Merrill, and BankBoston, with BT and BankAmerica serving as lead arrangers.
  • The facility features a tiered pricing structure, with varying fees for different levels of commitment.
  • Credit Lyonnais and Bank One have signed as senior managing agents, with commitments of $125 million each.
  • Fleet Bank and Bank of Nova Scotia have committed as co-agents, with $50 million each.
  • The existing revolver for Rental Service Corp. was last amended in November 1998, while NationsRent last tapped the bank loan market in October 1998.

Statistics:

  • $1.5 billion: The value of the credit facility.
  • $1.1 billion: The amount of the five-year revolving credit.
  • $400 million: The amount of the seven-year B-term loan.
  • 200 basis points: The pricing on the revolver above Libor.
  • $50 basis points: The commitment fee on the revolver.
  • 250 basis points: The pricing on the B-term loan above Libor.
  • $125 million: The commitment of Credit Lyonnais and Bank One as senior managing agents.
  • $50 million: The commitment of Fleet Bank and Bank of Nova Scotia as co-agents.
  • 62.5 basis points: The fee on the $35 million pro-rata commitment.
  • 50 basis points: The fee on the $25 million pro-rata commitment.
  • 35 basis points: The fee on the $15 million pro-rata commitment.
  • 30 basis points: The fee on the $25 million commitment to the B-term loan.
  • 20 basis points: The fee on the $15 million commitment to the B-term loan.
  • April 12: The deadline for replies to the facility.

Sources:

  • Market sources
  • BT Alex. Brown
  • BankAmerica
  • Merrill Lynch
  • BankBoston
  • Credit Lyonnais
  • Bank One
  • Fleet Bank
  • Bank of Nova Scotia