S&P shifts Penske Truck view to positive

S&P said it shifted its outlook for Penske Truck Leasing Co. LP to positive from stable and affirmed its ratings, including its BBB senior unsecured rating.

The agency said it forecasts moderate growth for Penske but that credit metrics will remain higher than historical levels.

“In the 12 months ended March 31, EBIT interest coverage improved to about 5x from the mid-2x area and debt to capital declined to the low-70% area from about 75% in the prior-year period. We do not expect this EBIT interest coverage will remain over the long term, especially as gains on used vehicle sales decline. However, given the mostly contracted nature of the company's business, we believe metrics will continue to benefit from recent pricing gains even amid a more moderate operating environment,” S&P said in a press release.

The agency said it estimates EBIT interest coverage will decline slightly to the mid-4x area in 2022 and then retreat to the low-3x area in 2023. However, it sees debt to capital hovering in the low-70% area through 2023.

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