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Prospect News home > News index > List of issuers H > Headlines for H&E Equipment Services, Inc. > News item |
S&P rates H&E notes BB-
S&P said it assigned its BB- issue-level rating and 3 recovery rating to H&E Equipment Services Inc.’s proposed $1.25 billion of senior unsecured notes due 2028. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in a default.
The company plans to use the proceeds to redeem its $950 million 5 5/8% senior unsecured notes due in 2025 on or after Dec. 7 and general corporate purposes.
“We believe H&E will use $250 million of the incremental proceeds (net of the call premium, tender premium, and transaction expenses) to fund its organic and inorganic growth strategy over the next two years. Because we do not net the company’s cash against its debt, we expect the additional debt will cause its S&P-adjusted debt to EBITDA to increase to the mid-3x area as of Dec. 31, 2020, but believe it will remain below our 4x downgrade trigger. As H&E deploys balance sheet cash for fleet purchases, we forecast its debt leverage will fall to the 3x-3.5x range by the end of 2021. Therefore, our BB- issuer credit rating and stable outlook remain unchanged,” S&P said in a press release.
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