• Strong investor demand during syndication
• Lower interest charges than under the facilities now replaced
• Greater liquidity from asset-based facility

Ashtead Group plc, the international equipment rental group serving the construction, industrial and homeowner markets has successfully closed its new US$675 million (£365 million) senior debt facility, announced on October 11, 2004.

Commenting on the new facility, Ashtead’s finance director, Ian Robson, said,

“Having closed our new asset-based facility, we will now benefit from lower borrowing costs and greater liquidity enabling us to invest further in our business at a time when US non-residential construction is exhibiting renewed growth.”

The syndication of the new first priority asset based facility (the “Facility”), jointly arranged by Banc of America Securities LLC and Deutsche Bank Securities Inc and fully underwritten equally by Bank of America N.A., Deutsche Bank Trust Company Americas and GE Commercial Finance, was significantly oversubscribed. At closing $490 million (£265 million) was drawn under the new facility to repay the amounts outstanding under the Group’s existing senior debt facility and its accounts receivable securitisation with the balance of the Facility available to fund future capital investment and working capital requirements.

The new Facility consists of a US$400 million revolving credit facility and a US$275 million term loan. Initial pricing is LIBOR plus 250 basis points for the term loan and LIBOR plus 275 basis points for the revolver. The initial pricing will be adjusted based on the ratio of funded debt to EBITDA according to a grid which varies between LIBOR plus 225 basis points and LIBOR plus 300 basis points allowing the Group to benefit from its anticipated future de-leveraging. Strong investor demand during syndication resulted in a reduction of the initial pricing of the term loan and a narrowing of the grid spread. The average initial interest rate is LIBOR plus 260 basis points compared with an average of LIBOR plus 390 basis points under the facilities now replaced. In addition the Group will amortise the upfront underwriting, legal and professional costs of the new facility over its five-year life, which will lead to an additional charge included within interest of approximately 75 basis points.

The Facility carries minimal amortisation of 1% per annum ($2.75 million) on the term loan and is committed for five years until November 2009 subject only to the Company’s £134 million convertible subordinated loan note being refinanced prior to November 2007.

The Group’s available liquidity under the facility at closing was $114 million. As the facility is asset-based, the maximum amount available to be borrowed (including drawings in the form of standby letters of credit) at any time depends on asset values (receivables, rental equipment, inventory and real estate) which are subject to periodic independent appraisal. The maximum amount which could be drawn at closing under the borrowing base was $632 million but this amount can rise up to the $675 million facility limit as additional assets are purchased during the life of the facility.

JP Morgan acted as financial advisor to the Company in connection with the new facility.