S&P: Ahern on watch

Standard & Poor's said it placed its ratings on Ahern Rentals Inc. on Creditwatch with negative implications, including the B+ long-term corporate credit and senior secured debt ratings.

"The Creditwatch stems from expected weakening conditions in nonresidential construction markets and Ahern's constrained liquidity entering a downturn," said S&P credit analyst John Sico.

Ahern has not reduced capital spending to the level that would be anticipated in weakening markets, limiting any positive free cash flow, and liquidity has suffered as a result of the company's still-high capital spending, the agency said.

Although the company is currently in compliance with financial covenants, a step down in leverage could become an issue if Ahern fails to maintain minimum liquidity of $25 million, S&P said, noting that the company is leveraged with debt to EBITDA at about 4.1x as of Sept. 30.

© 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.