S&P upgrades Sunstate

Standard & Poor's said it raised the long-term corporate credit rating on Sunstate Equipment Co. LLC by one notch to B, along with its secured debt rating one notch to B-.

The ratings also were placed on CreditWatch with positive implications. Sumitomo Corp., through its wholly owned subsidiary SMS International Corp., has increased its stake in Sunstate to 80% from 35%, S&P said.

The upgrade reflects improvement in Sunstate's credit metrics, which exceed ratios compatible with the prior rating, S&P said.

Conditions in the equipment-rental sector continue to improve relative to construction spending, the agency said, and Sunstate's operating performance is expected to continue improving.

The ratings also consider the company's weak business risk profile, S&P added, with limited diversity, capital-intensive equipment purchases, high leverage, and somewhat limited financial flexibility.

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