NationsRent's bank debt traded down to 45 early last week from the mid-60s following an announcement by the company that it was not in compliance with certain loan covenants. Dealers say the credit has been quoted down consistently over the last six months, in line with a slowing economy, and that this was the first trade. The last trade reportedly was at 70 about six months ago. "It's slowly crept down with the economy really stinking. It's a very cyclical business," said a market player. The Fort Lauderdale, Fla.-based company rents out construction equipment. Calls to Ezra Shashoua, cfo, were not returned. Further calls were referred to a spokeswoman, Jaquelyn Cortez-Walker, who also did not comment by press time.
In a statement, company officials cited the slowing economy and terrorist attacks for a third quarter loss of $19.8 million. The company announced that it will likely miss an interest payment on the term loan due Dec. 1. "They are having a liquidity crunch," said a market player. "The poor performance is due to a weak economy and slower than expected rental revenue growth. They could either refinance or file for Chapter 11." Company officials stated in a release that a bankruptcy filing is being considered and that there is less than $20 million available under the revolver.