Moody's lifts H&E Equipment

Moody's Investors Service said it upgraded H&E Equipment Services, Inc.'s senior unsecured debt to B1 from B2, the corporate family rating to Ba3 from B1 and the probability of default rating to Ba3-PD from B1-PD. The company's SGL-2 speculative grade liquidity rating is unchanged.

The upgrade reflects H&E's improved credit metrics from the company's solid operating performance. It also considers that H&E will continue to profitably grow the business and slowly reduce debt to EBITDA over the next few years, the agency said.

"H&E will continue to grow its scale, experience solid equipment utilization, and increase profitability such that debt to EBITDA improves roughly half a turn over the next 12-18 months," said Brian Silver, a Moody's vice president and senior analyst, in a press release.

"However, free cash flow will also be negative over this period as the company continues to invest in both fleet growth and footprint expansion," Silver continued.

The outlook is stable.

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