Ahern Rentals, Inc. Announces Commencement of Exchange Offer and Consent Solicitation for 7.375% Second Priority Senior Secured Notes due 2023

Published: Jun. 30, 2022 at 5:54 PM CDT

LAS VEGAS, June 30, 2022 /PRNewswire/ -- Ahern Rentals, Inc. ("Ahern" or the "Company") today announced it has commenced an offer to exchange its existing notes for new 8.375% second priority senior secured notes due 2026. The new notes will pay interest in cash at a rate of 8.375%. The new notes will mature May 15, 2026 (as compared to the maturity of May 15, 2023 on the existing notes). The new notes will be secured by a second lien on substantially all of the Company's assets. In addition to being guaranteed by the guarantors of the existing notes, the new notes will be guaranteed by Xtreme Re-Rental, LLC, an affiliate of the Company.

Investors who participate in the exchange offer will receive $1,000 principal amount of new notes for each $1,000 principal amount of existing notes tendered, provided that the tenders are submitted by 5:00 p.m. ET on July 14, 2022, unless extended. Holders who tender after July 14, 2022 will receive $950 of new notes per $1,000 of existing notes. Tendered existing notes may be validly withdrawn at any time prior to 5:00 p.m. ET on July 14, 2022, but not thereafter. Holders who participate in the exchange offer will also be providing consents to certain amendments to the indenture for the existing notes. The exchange offer will expire on July 28, 2022, unless extended. Accrued and unpaid interest on the existing notes that are exchanged will be paid in cash.

In order for the exchange offer to be completed, (1) all outstanding loans previously made from the Company to its affiliated companies must be repaid in full to the Company from these affiliated companies, (2) Xtreme Re-Rental, LLC, an affiliate of the Company which owns approximately $173 million in equipment based on original equipment cost (and currently re-rents certain of the same equipment to the Company), must become a guarantor for the new notes, (3) an amendment to the ABL Credit Facility must be made on terms acceptable to the Company which shall among other changes, extend the maturity of the ABL Credit Facility and provide consent for the exchange offer, and (4) the new notes must be rated by both Moody's Investors Service and S&P Global, Inc. In addition, the exchange offer is conditioned on minimum participation of the holders of at least 66-2/3% in aggregate principal amount of the outstanding existing notes, which constitutes requisite participation to release the collateral and guarantees for the existing notes and to eliminate certain restrictive covenants and events of default in the indenture for the existing notes.

Any existing notes that remain outstanding after the closing of the exchange offer will be effectively subordinated to the new notes with respect to substantially all the assets of the Company. In addition, most of the covenants for any existing notes that remain outstanding will have been eliminated.

Available Documents and Other Details

Documents relating to the exchange offer will only be distributed to holders of existing notes who complete and return an eligibility form confirming that they are either a "qualified institutional buyer" under Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or not a "U.S. person" under Regulation S under the Securities Act (such holders, "Eligible Holders"). Noteholders who desire to complete an eligibility form should request instructions by sending an e-mail to ahern@dfking.com, or call D.F. King & Co., the information agent for the exchange offer, at (800) 669- 5550 (toll-free) or (212) 269-5550 (for banks and brokers).

The new notes will not be registered under the Securities Act, or any other applicable securities laws and, unless so registered, the new notes may not be offered, sold, pledged or otherwise transferred within the United States to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the new notes are being offered and issued only (i) to persons reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) and (ii) to non-"U.S. persons" who are outside the United States (as defined in Regulation S under the Securities Act) and in both cases of (i) and (ii) are not beneficial owners in or resident of Canada or authorized representatives acting on behalf of beneficial owners in or resident of Canada. Beneficial owners in or resident of Canada or such authorized representatives should contact the information agent for the exchange offer listed in the preceding paragraph.

The complete terms and conditions of the exchange offer are set forth in the informational documents relating to the exchange offer. This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the new notes. The exchange offer and consent solicitation is only being made pursuant to the Confidential Offering Memorandum and Consent Solicitation Statement and the related letter of transmittal. The exchange offer is not being made to holders of existing notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

About Ahern

Ahern Rentals is the largest independently owned equipment rental company in the United States. With $906 million in fiscal year 2021 revenue, the company is ranked as the eighth largest U.S. equipment rental company by Rental Equipment Register ("RER"). Founded in 1953 in Las Vegas, Nevada, Ahern Rentals has expanded through organic growth to develop a national platform with 112 branch locations in 31 states as of March 31, 2022. Ahern focuses on the aerial market segment of the $50 billion equipment rental industry with an extensive fleet of "high reach" equipment, which is supplemented by a fleet of ground engaging, general rental, and specialty equipment to provide customers with a "one- stop" solution for their equipment needs. Serving a large and diverse customer base comprised of commercial and residential construction companies, specialty contractors, industrial companies, utility companies, governmental entities, and homeowners, Ahern provides a comprehensive range of equipment and solutions, including renting and selling used/new equipment, parts, supplies, and related merchandise, as well as providing maintenance, repair, and other services that supplement rental and sales activities.

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