S&P rates Paccar notes AA-

Standard & Poor's said it assigned an AA- rating on Paccar Inc.'s (AA-/stable/A-1+) proposed $750 million issuance of medium-term unsecured notes.

The issuance consists of $250 million in three-year, 6.375% notes and $500 million in five-year 6.875% notes.

Proceeds will be used to reduce short-term borrowing at the company's finance subsidiaries, leaving consolidated leverage ratios largely unchanged.

Ratings reflect the company's minimal financial risk stemming from conservative financial policies that enable the company to maintain healthy profitability, positive free cash flow generation and ample liquidity, even during steep cyclical downturns, the agency said.

The agency said it considers the company's business risk profile to be strong, despite the high cyclicality and capital-intensity of the heavy-duty truck business.

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