S&P rates Emeco notes BB-

Standard & Poor's said it assigned a B+ corporate credit rating to Emeco Holdings Ltd.

The outlook is stable.

The agency also said it assigned a BB- rating to Emeco's proposed Rule 144A senior secured notes. The recovery rating on the senior secured notes is 2, reflecting 70% to 90% expected default recovery.

The ratings reflect the company's weak business risk profile and aggressive financial risk profile, S&P said.

The ratings also consider Emeco's indirect exposure to the cyclical and volatile mining sector, relatively small size globally, leading position in Australia and fungible and good-quality asset base, said May Zhong, an S&P analyst.

Compared to other equipment rental providers with a more diversified industry exposure, Emeco's focus on mining services exposes it to a higher level of volatility in its fleet utilization rate and earnings due to the cyclical and volatile nature of the mining industry, Zhong said in a press release.

This is somewhat mitigated by its exposure to mines that are predominately in production, the analyst said.

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