UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2009
RSC HOLDINGS INC.
RSC HOLDINGS III, LLC
RSC EQUIPMENT RENTAL, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
DELAWARE
ARIZONA
(State of incorporation)
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001-33485
333-144625-01
333-144625
(Commission File Number)
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22-1669012
41-2218971
86-0933835
(IRS Employer Identification No.) |
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6929 E. Greenway Parkway, Suite 200
Scottsdale, Arizona
(Address of principal executive offices)
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85254
(Zip Code) |
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(480) 905-3300
(Registrant’s telephone number) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Credit Agreement Amendment
Effective July 30, 2009, RSC Holdings II, LLC (“RSC II”), RSC Holdings III, LLC (“RSC III”), RSC
Equipment Rental, Inc. (together with RSC III, the “Issuers” and the Issuers together with RSC II,
the “RSC Entities”) entered into the second amendment (the “Credit Agreement Amendment”) to the
Issuers’ senior secured asset-based loan facility (the “ABL Revolving Facility”) which is governed
by a credit agreement, dated as of November 27, 2006 (as amended on June 26, 2009, the “Credit
Agreement”), among the RSC Entities, RSC Equipment Rental of Canada Ltd., Deutsche Bank AG, New
York Branch, as U.S. administrative agent, Deutsche Bank AG, Canada Branch, as Canadian
administrative agent, and the other financial institutions party thereto from time to time, in
order to, among other things, extend the maturity of a portion of the ABL Revolving Facility and
reduce total commitments thereunder. The Credit Agreement has been amended and restated pursuant
to the Credit Agreement Amendment (the “Amended Credit Agreement”).
The Credit Agreement Amendment extended the maturity of a portion of the ABL Revolving Facility
from November 30, 2011 (the “Non-Extending Maturity Date”) until August 30, 2013. The extended ABL
Revolving Facility tranche was $819 million as of July 30, 2009. The Credit Agreement Amendment
reduced the aggregate commitments under the ABL Revolving Facility from $1,293 million to $1,100
million. The Credit Agreement Amendment also reduced the aggregate principal amount available
under a subfacility for the issuance of letters of credit from $400 million to $280 million. Under
the Amended Credit Agreement, the borrowers have the right to request one or more lenders to
convert their non-extending commitments under the ABL Revolving Facility to extending commitments
or provide new or increased extending commitments in an aggregate amount not to exceed $200 million
(the date on which such new extending commitments are provided or extending commitments are
increased, the “Commitment Increase Date”). Lenders are not obligated to convert, increase or
provide any extending commitment as a result of any such request. Furthermore, the Credit
Agreement Amendment increased the borrowing margin by 175 basis points on any outstanding amounts
under the ABL Revolving Facility whose maturity date is extended.
In addition, the Credit Agreement Amendment amended certain covenants. First, compliance with
financial covenants, including compliance with a consolidated leverage ratio and a consolidated
fixed charge coverage ratio, is now required when availability under the ABL Revolving Facility is
less than or equal to (a) before the Non-Extending Maturity Date and the Commitment Increase Date,
$140.0 million, (b) after the Commitment Increase Date but before the Non-Extending Maturity Date,
the greater of $140.0 million and 12.5% of the sum of the total commitments under the ABL Revolving
Facility and (c) on or after the Non-Extending Maturity Date, 12.5% of the sum of the total
commitments under the ABL Revolving Facility. Moreover, subject to certain exceptions, in order to
make restricted payments the borrowers must meet the following payment conditions: in addition to
an absence of any default or event of default and pro forma compliance with the financial
covenants, availability under the ABL Revolving Facility must be no less than (a) before the
Non-Extending Maturity Date and the Commitment Increase Date, $200.0 million, (b) after the
Commitment Increase Date but before the Non-Extending Maturity Date, the greater of $200.0 million
and 17.5% of the sum of the total commitments under the ABL Revolving Facility at such time
immediately after giving effect to the making of such specified payment and (c) on or after the
Non-Extending Maturity Date, 17.5% of the sum of the total commitments under the ABL Revolving
Facility immediately after giving effect to the making of such specified payment. Lastly, cash
dominion will be triggered if availability under the ABL Revolving Facility is less than (a) before
the Non-Extending Maturity Date and the Commitment Increase Date, $180.0 million, (b) after the
Commitment Increase Date but before the Non-Extending Maturity Date, the greater of $180.0 million
and 15.0% of the sum of the total commitments under the ABL Revolving Facility and (c) on or after
the Non-Extending Maturity Date, 15.0% of the sum of the total commitments under the ABL Revolving
Facility.
The Credit Agreement Amendment also provides that no issuing lender is required to issue a letter
of credit at any time that any lender under the ABL Revolving Facility is in default under certain
of its obligations thereunder unless the borrowers and such issuing lender enter into arrangements
satisfactory to such issuing lender eliminating such issuing lender’s risk with respect to such
defaulting lender, including the provision of cash collateral in an amount at least equal to the
defaulting lender’s participation in such letter of credit.
The borrowers are required to pay fees on the unused commitments of the lenders under the ABL
Revolving Facility. The commitment fee for the extending commitments increased in between 25 to
37.5 basis points based on loan utilization under the Credit Agreement Amendment. Furthermore, the
borrowers under the Credit Agreement have paid the lenders who consented to the Credit Agreement
Amendment a fee based on their commitments in the total amount of
approximately $7 million.