H&E Equipment Services, Inc. (NASDAQ:HEES) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

Notes Offering

On August24, 2017, the Company completed its previously announced notes offering (the “Notes Offering”) of $750million aggregate principal amount of 5.6250% senior notes due 2025 (the “Notes”).The Notes were sold in a private placement to a purchase agreement, dated August17, 2017, by and among the Company, certain subsidiary guarantors and Wells Fargo Securities, LLC (the “Initial Purchaser”).The Notes were resold by the Initial Purchaser to qualified institutional buyers to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons to Regulation S of the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Indenture

The Notes have been issued under an indenture, dated as of August24, 2017, by and among the Company, the subsidiaries guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Notes will mature on September1, 2025 and will accrue interest at the rate of 5.6250% per year. Interest on the Notes will be payable semi-annually on March1 and September1 of each year, commencing on March1, 2018. The Company may redeem some or all of the Notes at any time prior to September1, 2020 by paying a “make-whole” premium, plus accrued and unpaid interest and Additional Interest (as defined in the Indenture), if any, to the date of redemption. At any time prior to September1, 2020, the Company may use the net proceeds of certain equity offerings to redeem up to 40% of the principal amount of the Notes at a redemption price equal to 105.6250% of their principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date; provided that at least 60% of the aggregate principal amount of such Notes originally issued remains outstanding immediately following such redemption and such redemption occurs within 90 days of such equity offering. Subsequent to September1, 2020, the Notes may be redeemed to a declining schedule of redemption prices set forth in the Indenture.

The Notes are senior unsecured obligations of the Company and will rank equally in right of payment to all of the Company’s existing and future senior indebtedness and will rank senior to any of the Company’s subordinated indebtedness. The Notes will be unconditionally guaranteed on a senior unsecured basis by all of the Company’s current and future significant domestic subsidiaries (the “Guarantors”). In addition, the Notes will be effectively subordinated to all of the Company’s and the guarantors’ existing and future secured indebtedness, including the Company’s existing ABL credit facility, to the extent of the assets securing such indebtedness, and will be structurally subordinated to all of the liabilities and preferred stock of any of the Company’s subsidiaries that do not guarantee the Notes.

The Indenture contains covenants that limit the ability of the Company and the ability of its restricted subsidiaries to, among other things: incur additional debt; pay dividends and make distributions; make investments; repurchase stock; create liens; enter into transactions with affiliates; merge or consolidate; and transfer and sell assets. Certain of these covenants will cease to apply to the Notes for so long as the Notes have investment grade ratings from both Moody’s Investors Service, Inc. and Standard& Poor’s Financial Services LLC. If an event of default, as specified in the Indenture, shall occur and be continuing, either the trustee or the holders of a specified percentage of the Notes may accelerate the maturity of all the Notes. The covenants, events of default and acceleration rights described in this paragraph are subject to important exceptions and qualifications, which are described in the Indenture filed herewith.

If the Company experiences a Change of Control (as defined in the Indenture), the holders of the Notes will have the right to require the Company to repurchase their Notes at a repurchase price equal to 101% of their principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase. Furthermore, if the Company sells assets, the Company may be required to repurchase the Notes at a repurchase price equal to 50% of their principal amount, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase.

The description set forth above of certain of the terms of the Indenture does not purport to be complete and is qualified in its entirety by the full text of the Indenture, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

Registration Rights Agreement

Under a registration rights agreement with the Initial Purchaser and the Guarantors, the Company and the Guarantors have agreed to (i)use all commercially reasonable efforts to file, no later than 180 days after the issue date of the Notes, a registration statement (the “Exchange Offer Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) with respect to a registered offer to exchange the Notes for new notes (the “Exchange Notes”) of the Company having terms substantially identical in all material respects to the Notes (except that the Exchange Notes will not contain any transfer restrictions) (the “Exchange Offer”), (ii) use all commercially reasonable efforts to have the Exchange Offer Registration Statement declared effective by the SEC on or prior to 270 days after the issue date of the Notes, (iii)commence the Exchange Offer; and (iv)use all commercially reasonable efforts to issue, on or prior to 30 business days (or longer, if required by the federal securities laws) after the Exchange Offer Registration Statement is declared effective by the SEC, Exchange Notes and related guarantees in exchange for all notes and guarantees tendered in the Exchange Offer.

In addition, the Company has agreed, in some circumstances, to file a “shelf registration statement” that would allow some or all of the Notes to be offered to the public.If the Company does not comply with its obligations under the registration rights agreement, it will be required to pay Additional Interest to holders of the Notes.

The description set forth above of certain of the terms of the registration rights agreement does not purport to be complete and is qualified in its entirety by the full text of the registration rights agreement, which is attached hereto as Exhibit 4.2 and is incorporated herein by reference.

Use of Proceeds, Tender Offer and Redemption

On August24, 2017, the Company used a portion of the proceeds from the Notes Offering to repurchase approximately $329.7 million aggregate principal amount of its existing 7% Senior Notes due 2022 (the “Old Notes”) that were validly tendered (and not validly withdrawn) prior to 5:00p.m., New York City time, on August23, 2017 (the “Expiration Time”) of the Company’s previously announced tender offer (the “Tender Offer”). Those who tendered their Old Notes prior to the Expiration Time received $1,038.90 for each $1,000 principal amount of Old Notes tendered.

On August24, 2017, following its repurchase of the Old Notes in settlement of the Tender Offer, the Company issued a notice of redemption for all remaining Old Notes that were not validly tendered in the Tender Offer. The notice of redemption provides that the remaining Old Notes will be redeemed at a redemption price equal to 103.500% of the aggregate principal amount of the Old Notes to be redeemed, plus accrued and unpaid interest on the Old Notes to the redemption date, on September25, 2017. The Company will use a portion of the proceeds from the Notes Offering to pay for the redemption of the Old Notes. Also on August24, 2017, the Company, to irrevocable instructions provided to the Trustee, satisfied and discharged its obligations under the indenture governing the Old Notes.

The Company expects to use the remaining portion of the net proceeds from the sale of the Notes to pay fees and expenses incurred in connection with the foregoing and to repay a portion of the amounts outstanding under its existing ABL credit facility.

Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 1.01.

Item 1.01. Material Modifications to Rights of Security Holders.

The information provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 1.01.

Forward-Looking Statements

Certain statements contained herein are “forward-looking statements” within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements after the date hereof.

Item 1.01. Other Events

On August24, 2017, the Company issued a press release announcing the closing of the Notes Offering, the settlement of the Tender Offer and the issuance of a notice of redemption with respect to the outstanding Old Notes. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 1.01. Financial Statements and Exhibits

H&E Equipment Services, Inc. Exhibit
EX-4.1 2 d444563dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 EXECUTION VERSION H&E EQUIPMENT SERVICES,…
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About H&E Equipment Services, Inc. (NASDAQ:HEES)

H&E Equipment Services, Inc. is an integrated equipment services company. The Company rents, sells and provides parts and services support for approximately four core categories of specialized equipment, such as hi-lift or aerial work platform equipment; cranes; earthmoving equipment, and industrial lift trucks. The Company’s segments include equipment rentals, which rents various types of construction and industrial equipment; new equipment sales, which sells new equipment in its core product categories; used equipment sales, which sells used equipment from its rental fleet, as well as from sales of inventoried equipment that it acquires through trade-ins from its equipment customers and through purchases of used equipment; parts sales, which sells new and used parts for the equipment the Company sells and also provides parts to its own rental fleet, and services, which provides maintenance and repair services for its customers’ equipment and to its own rental fleet.