S&P upgrades Ashtead

S&P said it raised the long-term corporate credit rating on Ashtead Group plc to BB+ from BB.

The outlook is stable.

The agency also said it raised the ratings on the company's $900 million and $500 million second-lien notes to BBB- from BB+.

The recovery rating is unchanged at 2, indicating 70% to 90% expected default recovery.

The upgrades reflect Ashtead's strong operating performance driven by favorable markets and prudent financial policy, resulting in solid profitability and an expectation of positive cash flow generation in the next two years, S&P said.

The upgrades also are based on an expectation that Ashtead will maintain credit metrics in line with the rating with funds from operations-to-debt at higher than 45% and debt-to-EBITDA of less than 2x in the next two years, the agency said.

Ashtead's operating performance has been consistently resilient over the last five years, S&P said.

The equipment rental industry has been enjoying positive trends with the non-residential construction market remaining strong in the United States and United Kingdom, the agency said.

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