S&P ups Custom Truck One Source

S&P said it upgraded Custom Truck One Source LP and the ratings on its revolving credit facility and first-lien term loan to B+ from B. The 3 recovery rating remains unchanged, indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

Custom Truck One Source proposes increasing its revolver to $125 million and extending the maturities of its revolving credit facility and first-lien term loan to 2023 and 2025, respectively.

“The upgrade reflects the company's low leverage relative to other rated financial sponsor-owned peers. While we think there could be some volatility in Custom Truck's end markets in the short-term, we believe it has generated an adequate cushion in its metrics to operate through an economic cycle and absorb some increase in leverage. The upgrade also reflects our view that the company will not engage in significant shareholder-friendly behavior or meaningful debt-financed acquisitions in the near future,” said S&P in a press release.

The outlook is stable.

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