Equipment rental and asset management company EquipmentShare issued a combined $1 billion in private bond offerings this year as the company looks to increase its liquidity ahead of 2024.
One of the largest equipment rental companies in the United States, EquipmentShare initially issued a $640 million offering in May.
It issued a second deal on Sept. 18 for $300 million that was upsized to $400 million ahead of closing Sept. 21, according to an EquipmentShare release. The upsizing was the result of the second issuance being oversubscribed, Alec Jorgensen, vice president of finance and treasurer of EquipmentShare, told Equipment Finance News.
“We went out with $300 million and, due to market demand, we were significantly oversubscribed, so we upsized to $400 million,” he said. “The sum of the two issuances puts us at about $1.04 billion of total second lien debt, which is right in line with our capital plan.”
The decision to create two issuances was part of the company’s strategy to market the bonds, since the first offering in May was already one of the largest for a first-time issuer, Jorgensen said.
“Our strategy was always we would go back to the market to try to get close to those billion dollars in the fall, which is exactly what we did,” he said. “That gave us an opportunity to further educate the market on who EquipmentShare is and outperform our expectations as far as financial and operational goals.”
Looking to 2024 growth
EquipmentShare also increased its revolving credit facility with Capital One to $3 billion from $2 billion on May 10, according to a company release. All of the company’s financing activities are to aid its growth plans into 2024, Jorgensen said.
“In 2019, we were just north of $200 million in revenue, and as of about the six-month mark this year, we were over $2 billion in trailing 12-month revenue,” he said. “We went from a small number of sites to over 180 sites.”
The company is on track to open an additional 40 sites this year, Jorgensen said, and estimates that its growth makes it the fourth-largest equipment rental company in the United States.
With an estimated $900 million in rental volume in 2022, EquipmentShare ranks eighth in the 2023 RER 100, a listing of the top rental companies by volume published by the Rental Equipment Register. The top 10 U.S. rental companies represented 44% of the industry’s total revenues in 2022, according to United Rentals’ second-quarter earnings presentation.
