Fitch Places United Rentals' (North America) on Rating Watch Negative

Fitch Ratings has placed the long-term Issuer Default Rating (IDR) of United Rentals (North America) Inc. (URNA) and the long-term IDR of its parent company, United Rentals Inc. (URI), on Rating Watch Negative. All debt-level ratings have also been placed on Rating Watch Negative. Approximately $2.9 billion of debt is affected by these rating actions. A complete list of rating actions follows at the end of this release.

The rating action follows the recent announcement made by URI that they have entered into a definitive merger agreement under which the company will acquire RSC Holdings, Inc. (RSC) in a cash-and-stock transaction valued at $18.00 per share, or a total enterprise value of $4.2 billion, including $2.3 billion of net debt. The proposed transaction is expected to provide URI with a lower cost base and a less volatile revenue profile. Additionally, the new company is expected to benefit from increased rental penetration and realization of over $200 million of potential cost savings.

However, Fitch has concerns centering on the increased level of debt that URI will have to issue to finance the cash portion of the transaction, which may weaken its financial flexibility. Based on the current terms, the acquisition appears to bring a more secured element to URI's funding profile, which will potentially lower the recoveries for unsecured debtholders. The acquisition would also add near-term integration and execution risks to URI's current business model. Additionally, Fitch views the URI Board's announcement of up to $200 million in stock buyback after closing as being aggressive, in light of URI's leverage and capital levels.

In resolving the Rating Watch, Fitch will review the prospective impact of the acquisition on URI's credit profile and capital structure, its ability to achieve prospective synergies, and expected integration costs. Fitch expects the IDR of URNA and URI will go no lower than one notch following the merger. However, the unsecured and subordinate debt level ratings may be lowered more than one notch given poorer recovery prospects.

The notching of the parent company's (URI) IDR below that of URNA reflects that the vast majority of the assets are at the operating company level and are therefore unavailable for the repayment of holding company notes.

Headquartered in Greenwich, CT, URI is the largest equipment rental company in the world with $4 billion in assets as of Sept. 30, 2011. The company was founded and taken public in 1997. As of Sept. 30, 2011, URI's rental fleet carried an original equipment cost of $4.3 billion and consisted of approximately 2,900 classes of equipment. URNA is the principal operating subsidiary of URI. As of third quarter 2011, nearly 75% of the consolidated entity's assets and liabilities were held within URNA. URI currently operates 541 rental locations in the U.S. and Canada. The company maintains a well-established retail franchise across North America, with concentrations on the eastern and western seaboard.

Fitch has placed the following ratings on Rating Watch Negative:

United Rentals, Inc (URI)

--Long-term IDR at 'B'.

United Rentals (North America), Inc. (URNA)

--Long-term IDR at 'B+';

--Senior secured debt at 'BB/RR1';

--Senior unsecured debt at 'B+/RR4';

--Subordinated debt at 'B/RR6'.

Additional information is available at 'www.fitchratings.com'. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable Criteria & Related Research:

--'Global Financial Institutions Criteria' (Aug. 16, 2011);

--'Finance and Leasing Companies Criteria' (Dec. 13, 2011);

--'Recovery Ratings for Financial Institutions' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171

Recovery Ratings for Financial Institutions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648615

Finance and Leasing Companies Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=659834

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