S&P lifts CAI International

S&P said it raised CAI International Inc.’s issuer rating to BB+ from BB and removed all its ratings from from CreditWatch, where it placed them with positive implications on June 25. The outlook is stable. Th agency also affirmed the BBB- issue-level rating on subsidiary Container Applications Ltd.'s senior secured notes. The recovery rating on this debt remains 1.

“CAI's credit profile has improved in 2021 and we expect it to remain relatively consistent thereafter.We expect CAI to spend a record amount (at least $1 billion) to add to its container fleet in 2021 to meet strong demand. Part of the increase in capital spending has been driven by record high prices for new equipment. Yet despite the incremental debt (we expect close to $600 million additional) to finance capital spending, we expect certain of CAI's credit metrics to improve in 2021 and to remain relatively stable through at least 2022,” S&P said in a press release.

The agency said it forecasts EBIT interest coverage of 3x-4x through 2022, compared with 2.1x in 2020.

“We expect funds from operations (FFO) to debt to remain in the mid-teens percent area over this period (compared with 14% in 2020).”

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