Moody's upgrades United Rentals

Moody's Investors Service said it upgraded United Rentals (North America), Inc.'s corporate family rating to B1 from B2, senior secured debt to B1 from B2, senior unsecured debt to B2 from B3, senior subordinated debt to B3 from Caa1, Quarterly Income Preferred Securities (QUIPS) to Caa1 from Caa2 and speculative grade liquidity rating to SGL-2 from SGL-3.

The outlook is stable.

Moody's said the upgrade reflects the company's leading competitive position in the North American equipment rental industry and the resolution of United Rentals' internal accounting investigation. The company is benefiting from the strong non-residential construction market, which is the key to its financial performance over the near to medium term. Interest coverage of 2.2x and 3.4x leverage through the last 12 months ended in June solidly position United Rentals within the B1 rating category.

These strengths, however, are balanced against the ongoing cyclicality of the non-residential construction sector, the agency said. Additionally, the company continues to address material weaknesses in its accounting controls that were identified as part of the investigation and remains subject to various SEC investigations and shareholder suits related to the accounting irregularities.

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