Fitch: Penske Truck notes BBB+

Fitch Ratings said it expects to assign a rating of BBB+ to the 10-year $500 million senior unsecured debt co-issued by Penske Truck Leasing Co., LP and PTL Finance Corp.

The expected 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 Penske's long-term issuer default rating reflects the predominately unsecured funding profile and unencumbered asset coverage available to senior unsecured noteholders, the agency said.

Fitch said it does not believe there will be a material impact to Penske's leverage resulting from the issuance as proceeds will be used to repay existing outstanding debt and for general corporate purposes.

The expected issuance has no impact to Penske's issuer default rating or stable outlook, the agency said.

Penske's leverage, as measured by managed debt to equity, was 3.6x as of June 30, Fitch said.

The ratings are supported by the company’s established market position in the truck leasing and rental business, the agency said, and growing market share in the logistics business.

The company has good asset quality, relatively consistent operating performance through various cycles, appropriate leverage, solid liquidity and a largely unsecured funding profile, S&P said.

The ratings are constrained by the company’s higher leverage appetite relative to peers, lack of demonstrated access to the unsecured markets through a variety of market cycles, modest concentrations in the logistics segment and some pension obligation risk, the agency noted.

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