Moody’s gives H&E Equipment notes B2

Moody’s Investors Service said it assigned H&E Equipment Services, Inc.’s new $1.25 billion senior unsecured notes a B2 rating.

Proceeds will be used to refinance the company’s $950 million of 5 5/8% senior unsecured notes due 2025, fund prepayment penalties and transaction fees and add the remaining cash to the balance sheet.

“H&E Equipment is raising $300 million of incremental debt anticipating that free cash flow will be negative for at least the next few years resulting from an accelerated pace of branch expansions that entails execution risk,” said Brian Silver, a Moody’s vice-president and lead analyst for H&E Equipment, a press release. “However, we anticipate H&E’s liquidity will remain good through 2021 supported largely by its revolver, and the company will grow its scale and expand its footprint while also gradually deleveraging over the next few years as the expansion adds to profits,” added Silver.

Moody’s also affirmed H&E’s B1 corporate family rating and B1-PD probability of default rating.

The outlook remains stable.

© 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.