Fitch rates new Penkse debt BBB+

Fitch Ratings said it expects to assign a rating of BBB+ to the $500 million senior unsecured debt co-issued by Penske Truck Leasing Co., LP and PTL Finance Corp.

The expected unsecured debt rating reflects that the debt is expected to rank pari passu with all other senior unsecured debt issued by Penske or PTL Finance, Fitch said.

The equalization of the expected rating with the company’s issuer default rating reflects the predominantly unsecured funding profile and unencumbered asset coverage available to senior unsecured creditors, the agency said.

Fitch said it does not believe there will be a material impact on Penske’s leverage as a result of the issuance, as proceeds will be used to pay down existing debt under its corporate revolver and ABS facility.

The ratings also consider the company’s established market position in the truck leasing business, growing market share in the logistics and supply chain solutions businesses, adequate leverage, strong liquidity and a largely unsecured funding profile, the agency said.

Rating constraints include customer concentration in the supply chain solutions segment, cyclicality inherent in used-vehicle pricing and the commercial-rental business and potential regulatory impact on business trends, Fitch said.

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