S&P upgrades United Rentals

S&P said it raised its corporate credit rating on United Rentals Inc. and its operating subsidiary, United Rentals (North America) Inc., to BB from BB-.

The outlook is stable.

At the same time, the agency raised the issue-level rating on the company's $1 billion senior secured notes due 2023 to BBB- from BB+. The recovery rating is unchanged at 1, reflecting an expectation of very high (90%-100%, rounded estimate 95%) recovery for lenders in the event of a payment default.

S&P also raised the issue-level ratings on the company's senior unsecured debt in various tranches due 2024 to 2028 to BB from BB-. The recovery rating is unchanged at 4, reflecting average (30%-50%, rounded estimate 30%) recovery.

“The upgrade reflects our expectation that URI will maintain its debt-to-EBITDA of 3x or less over the next 12-18 months, which should provide it with a sufficient cushion to absorb the volatility in its rental equipment demand over an economic cycle,” the agency said in a news release.

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