Moody's downgrades Ahern

Moody's Investors Service said it lowered corporate family and probability-of-default ratings of Ahern Rentals, Inc. to B3 from B2, $290 million 9¼% second-priority global notes due August 2013 to Caa1 (LGD5, 77%) from B3 (LGD5, 76%) and changed the outlook to stable from negative. The company's speculative grade liquidity rating of SGL-3 was affirmed.

The downgrade reflects Ahern's declining rental rates from intensified price competition, expectation of a weak 2009 U.S. non-residential construction environment, risk of used equipment market softening and somewhat diminished liquidity profile, according to the agency.

Ahern maintained a relatively high level of capital spending into the second quarter of 2008 although the non-residential construction activity outlook was weakening, the agency said.

Heightened price competition, including in Ahern's core Las Vegas market, will likely continue pressuring margins and limit the pace with which the company can reduce leverage from internal cash flow generation, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.