8-K: United Rentals Extends Key Receivables Securitization Facility to June 2026, Adds New Purchaser

• United Rentals, Inc. and its subsidiary, United Rentals (North America), Inc., along with United Rentals Receivables LLC II, have entered into Amendment No. 17 to their Third Amended and Restated Receivables Purchase Agreement and Amendment No. 10 to their Third Amended and Restated Purchase and Contribution Agreement.
• The amendment, effective June 6, 2025, extends the expiration date of the Amended A/R Facility from June 24, 2025, to June 24, 2026. The facility can be further extended on a 364-day basis by mutual agreement of the Company and the purchasers.
• Reliant Trust has been added as a new Purchaser under the Receivables Purchase Agreement, joining existing purchasers Liberty Street Funding LLC, Gotham Funding Corporation, and GTA Funding LLC.
• The commitment fee structure has been revised: it will be 0.325% if the facility usage is 66% or greater, and 0.375% if usage is less than 66%. Previously, the fee was a flat 0.375%.
• Advances under the facility will continue to be reflected as debt on the condensed consolidated balance sheets, with receivables in the collateral pool reflected as assets.
• The facility remains structured such that receivables in the collateral pool are the lenders' only source of repayment, and advances are permitted only if eligible receivables exceed outstanding loans by a specified amount.

Score: 7

Explanation: The extension of a significant receivables facility and the potential for reduced financing costs are positive for liquidity and financial management. The addition of a new purchaser also strengthens the funding base. No negative aspects or significant risks beyond standard facility terms were disclosed.

• The extension of a material receivables purchase facility ensures continued access to liquidity for United Rentals.
• The addition of Reliant Trust as a new purchaser diversifies the funding base for the facility.
• The revised commitment fee structure offers potential cost savings, reducing the fee from 0.375% to 0.325% if facility usage is 66% or higher.

• The facility is subject to standard termination events, including a change of control of United Rentals, Inc. or United Rentals (North America), Inc.
• Failure to make payments or non-compliance with standard default, delinquency, dilution, and days sales outstanding covenants could lead to termination.
• Breach of the financial ratio covenant under United Rentals (North America), Inc.'s credit facility would also constitute a termination event.
• Upon early termination, no new amounts will be advanced, and collections on securing receivables will be used to repay outstanding advances.

The facility can be further extended on a 364-day basis by mutual agreement of the Company and the purchasers, indicating a potential for continued long-term financing through this structure.

• The Company confirmed its performance undertaking originally given in May 2005 in connection with the initial establishment of the securitization facility, as amended and restated in September 2012 in connection with an amendment and restatement of the securitization facility.

This type of receivables securitization facility is a common financing tool for companies with large, predictable streams of accounts receivable, such as those in the equipment rental industry. It provides a flexible and often cost-effective way to manage working capital and enhance liquidity by converting future cash flows into immediate funds. The extension of this facility suggests continued stability in United Rentals' access to capital markets for its operational needs, aligning with typical financial management strategies for large industrial service companies.

• NA

• Shareholders: The extension of the facility ensures continued liquidity and stable working capital management, which supports ongoing operations and financial stability, potentially positively impacting shareholder confidence.
• Creditors: The facility provides a secured financing mechanism, with receivables as collateral, which clarifies the repayment structure for the lenders involved.
• Employees, Customers, Suppliers: No direct impact on these stakeholders is immediately apparent from this financial agreement, though stable company finances generally benefit all stakeholders.

• The Seller agrees to novate Wells Collection Accounts (x6839 and x2074) to become accounts of the Seller and deliver a Collection Account Agreement covering these accounts within 90 days after the effective date (June 6, 2025).
• The facility may be further extended on a 364-day basis by mutual agreement of the Company and the purchasers.

• The transaction involves United Rentals, Inc. (Company, Collection Agent), United Rentals (North America), Inc. (Originator, URNA), and United Rentals Receivables LLC II (SPV, Seller), which are related entities. The SPV acquires receivables from URNA and sells interests to purchasers, with United Rentals, Inc. acting as Collection Agent and providing a performance undertaking. This is an ongoing, structured finance arrangement between related parties.

• 2005-05-01: Approximate date of initial establishment of the securitization facility.
• 2012-09-24: Date of the Third Amended and Restated Receivables Purchase Agreement and Purchase and Contribution Agreement.
• 2024-05-24: Date of the previous Amendment No. 16 to the Agreement.
• 2025-06-06: Effective date of Amendment No. 17 to the Receivables Purchase Agreement and Amendment No. 10 to the Purchase and Contribution Agreement.
• 2025-06-24: Original expiration date of the facility prior to the amendment.
• 2025-09-04: End of the transition period for novating Wells Collection Accounts (90 days after Effective Date).
• 2026-06-24: New expiration date of the Amended A/R Facility.