Moody's rates Williams Scotsman notes B3

Moody's Investors Service said it assigned a prospective B3 rating to Williams Scotsman's new $325 million senior unsecured note offering. Moody's also affirmed Williams Scotsman's B2 corporate family rating.

The outlook is stable.

Moody's said the rating considers Williams Scotsman's intrinsic credit strengths, which are benefiting from an improving operating environment. The company has gained a leading market share in the modular space industry over the past few years. Additionally, the company has a diverse customer base throughout the United States and Canada, which limits its exposure to a regional economic downturn.

Credit weaknesses include high leverage multiples and pretax interest coverage levels that have historically been below peers. However, the large interest expense burden should be mitigated to a degree by the current recapitalization, the agency said.

The senior unsecured offering is expected to be used in conjunction with the proceeds from the company's initial public offering to retire the company's outstanding notes due in 2007 and 2008.

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