Fitch assigns Emeco notes BB-

Fitch Ratings said it assigned Emeco Pty Ltd.'s $335 million senior secured notes due 2019 a final rating of BB- with a recovery rating of RR3.

The final rating is in line with the expected rating assigned on Feb. 27 and follows a review of the final documentation, which materially conformed to the draft documentation previously received. Emeco Pty Ltd. is a wholly owned subsidiary of Emeco Holdings Ltd. (B+/stable).

The notes are secured by the assets of the Emeco Group, and guaranteed by Emeco and some of its subsidiaries.

Proceeds will largely be used to refinance existing debt of about A$350 million.

Fitch said Emeco's ratings reflect the high sensitivity of its earnings to commodity cycles, due to its position as a rented equipment supplier to mining companies. The ratings also take into account Emeco's low operating leverage, Fitch's expectation of an improvement in Emeco's financial profile and Emeco's flexibility in managing capex, which allows it to preserve operating cash flows during industry downturns, the agency said.

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