Moody's downgrades Ahern Rentals

Moody's Investors Service said it downgraded the ratings of Ahern Rentals Inc. including the company's corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, and senior secured second-lien notes rating to Caa1 from B3.

The ratings have been placed on review for further downgrade. The outlook is ratings under review.

"The downgrade of Ahern's ratings and placement of the ratings on review for further downgrade is, in part, from the company's recent dividend which reduces liquidity following the onset of the coronavirus pandemic while the company has adequate liquidity", said Brian Silver, a Moody's vice president and lead analyst for Ahern Rentals, in a press release.

Ahern paid shareholders a dividend of $16 million last week. “Although not especially large, the payment was unanticipated and represented the maximum allowed per the company's credit agreement at the time. Pro forma for the outflow, which is assumed to have been funded primarily with the company's ABL, Ahern had less than $150 million of total liquidity,” the agency said.

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