Moody's ups H&E outlook to positive

Moody's Investors Service said it affirmed the debt ratings of H&E Equipment Services, LLC, including the senior secured bank facility at B2, corporate family rating at B3 and senior notes at B3.

The outlook was changed to positive from stable.

This change reflects the company's recent announcement of its initial public offering, which could raise up to about $200 million and will enhance the company's liquidity and help improve credit metrics, the agency said.

Proceeds will be used to acquire Eagle High Reach Equipment, Inc. for about $53 million, pay down existing outstandings under the company's senior secured bank facility, purchase rental equipment currently under operating leases and pay deferred compensation.

The corporate family rating reflects Moody's belief that H&E faces important operational and financial challenges such as the ongoing cyclicality of the equipment rental sector. Moody's said it believes that H&E has some significant strengths that will help mitigate these challenges, including participation in the recovery of the non-residential construction market, the broad diversification of the company's geographic footprint and improving profit margins.

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