Moody's reviews Mobile Mini, may up Mobile Services

Moody's Investors Service said it placed Mobile Mini, Inc.'s Ba3 corporate family and B1 senior notes rating on review for downgrade, as well as Mobile Services Group's corporate family rating at B2 on review for upgrade.

The review was prompted by Mobile Mini's bid to merge with Mobile Services Group (also known as Mobile Storage Group) for $701.5 million. As a part of deal, Mobile Mini would assume $535 million of Mobile Services Group debt.

The agency noted the Mobile Services franchise would provide Mobile Mini an entry into new markets and allow it to grow its national scale. Where there is overlap, the company is expected to close redundant facilities and realize significant synergies, which helps offset the substantial purchase price.

Moody's said the possible downgrade on Mobile Mini ratings is based on the expectation that post-acquisition leverage will increase from current levels and that interest coverage will weaken. Mobile Mini has consistently operated with a conservative leverage profile, however, and the agency said it expects the company to use cash flow for debt reduction.

The possible upgrade on Mobile Services ratings reflects Moody's expectation that the rating profile of the merged companies will be no lower than the B2 rating currently assigned to Mobile Services Group, according to the agency.

© 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.