S&P rates EquipmentShare.com notes B

S&P said it assigned B issue-level and 3 recovery ratings to EquipmentShare.com Inc.’s planned sale of $500 million of senior secured second-lien notes and upgraded its ratings on the company and its outstanding senior secured second-lien notes to B from B-. The agency also revised the recovery rating on these notes to 3 (50%-70%; rounded estimate: 50%) from 4, indicating meaningful recovery in default.

“We expect continued favorable conditions in the equipment rental market over at least the next 12 months. Following two years of robust demand amid new equipment shortages, we expect conditions in the U.S. equipment rental market will remain favorable in 2024. Specifically, we expect nonresidential construction and industrial spending, including investments in infrastructure and manufacturing megaprojects in the U.S. to be only partly offset by downside risks in the vertical for office buildings,” S&P said in a statement.

The agency said it forecasts improved S&P Global Ratings-adjusted EBITDA margins of up to 100 basis points in 2024.

EquipmentShare.com plans to use the proceeds to repay $478 million of debt, buy out $16 million of operating leases and fund $6 million of transactions.

The outlook is stable.

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