Moody’s rates Penske Truck notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to Penske Truck Leasing Co., LP's $500 million of senior unsecured notes due 2020.

The outlook is stable.

Proceeds are expected to be used to repay outstanding borrowings under the company's revolving credit and ABS facilities.

Moody’s said the Baa3 rating reflects Penske Truck’s well-established position in full-service truck leasing, truck rentals and contract maintenance services for third party fleets. Full-service leasing provides relative predictability of cash flows through the economic cycle as lease expirations in any given year are manageable.

Furthermore, free cash flow tends to be counter-cyclical, because the company curtails fleet investments during economic downturns, while it increases fleet spending during recoveries and expansion. Penske Truck’s shorter-term commercial and consumer rental businesses are more susceptible to under-use during downturns, however, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.