S&P rates Global Tip Two BB

Standard & Poor’s said it affirmed the BB long-term corporate credit rating on Global TIP Holdings One BV (TIP One).

The agency also said it subsequently withdrew the ratings.

Meanwhile, S&P said it assigned a BB long-term corporate credit rating to Global TIP Holdings Two BV (TIP Two), the new debt issuer and holding company of TIP Trailer Services group.

The outlook is stable.

The rating reflects a view that the company will continue with its high capital expenditure in the next few years while it executes its strategy of renewing and growing its leasing and service businesses after a period of fleet underinvestment, S&P said.

This strategy is likely to increase TIP Two’s financial leverage as the agency said it sees limited organic growth potential in the near future while the market remains somewhat subdued.

Conditions in the European trailer operating lease industry are closely linked to general economic prospects, S&P said.

Given TIP’s exposure to European economies in which growth is slow and uneven, the agency said it expects muted demand and oversupply in the industry.

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