Moody’s: Custom Truck facilities B2 view to positive

Moody’s Investors Service said it assigned CTOS, LLC’s $683 million senior secured credit facility a B2, consisting of a $125 million revolver with a one-year extension to 2023 and a $558 million two-year extension to the term loan to 2025. Moody’s will withdraw the ratings on the company’s debt that is being refinanced at the close of the transaction. The rating outlook has been changed to positive.

Moody’s also affirmed the B2 corporate family rating and a B2-PD probability of default rating.

“Custom Truck’s scale is increasing and its credit metrics are improving, driven by strong end-market demand for its products, primarily from the utility and telecom industries, supported by an aging electrical grid and the ongoing buildout of 5G networks,” said Brian Silver, a Moody’s vice president and lead analyst for CTOS, in a press release.

The positive outlook reflects Moody’s expectation funds from operations-to-debt will be sustained above 20% on healthy end-market demand. CTOS will continue to invest in its fleet, but also will pull back aggressively if demand slows. The positive outlook also does not anticipate the payment of any dividends to the company’s sponsor.

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