EquipmentShare Prices $1.35B in Senior Secured Notes Due 2034

EquipmentShare.com priced a $1.35 billion private offering of senior secured second lien notes due 2034, the company said. The aggregate principal amount was boosted by $300 million from the initially proposed size.

EquipmentShare provides construction equipment rental and technology services. It will use the proceeds for general corporate purposes and to fund growth, the company said. Some of the money will also repay existing borrowings and cover near-term capital expenditures.

The notes are senior secured second lien. In the capital structure, they sit behind first lien lenders and ahead of unsecured creditors. The private placement was conducted under Rule 144A to qualified institutional buyers. EquipmentShare did not disclose the coupon rate, yield, or any call protection terms in its pricing announcement.

For holders of EquipmentShare's existing debt, the larger deal increases total leverage. The company's balance sheet will carry an additional $1.35 billion in second lien obligations. That could affect recovery assumptions in a downside scenario. The added liquidity also reduces near-term refinancing risk, giving the company a cushion for its fleet expansion and geographic growth.

EquipmentShare last raised debt in 2023 with a $700 million term loan B. The new notes layer on top of that financing.

The upsizing coincided with receptive private credit markets, especially for companies with recurring revenue streams. EquipmentShare's rental model generates steady cash flow, which supported the larger offering. Multiple investment banks that have worked with EquipmentShare on prior financings managed the transaction, the company said.

Construction equipment rental is a capital-intensive business. Companies must invest heavily in fleet and maintenance. EquipmentShare's technology platform helps manage utilization and pricing. The company has grown through organic expansion and acquisitions, adding branches across the U.S. The larger note sale gives it firepower to continue that strategy without immediate reliance on equity markets.

Second lien notes typically offer a higher yield than first lien debt to compensate for lower priority in a default. The spread between first and second lien can widen when credit conditions tighten. EquipmentShare's decision to upsize suggests the spread was favorable enough to lock in the additional capital now.

The offering is expected to close this week. EquipmentShare's common stock trades thinly on the OTC market under the ticker EQPT. The company does not hold quarterly earnings calls, limiting transparency for equity investors.