Moody's rates RSC revolver Ba2, notes Caa1

Moody's Investors Service said it made changes and assigned new ratings to RSC Equipment Rental Inc. and RSC Holdings III, LLC.

The agency said it assigned to RSC Holdings III's senior secured $1.1 billion asset-based revolving credit facility a Ba2 rating (LGD 2; 17%) and a Caa1 (LGD 5, 78%) rating to its senior notes.

The agency also upgraded RSC Equipment Rental's $200 million senior notes due 2019 and $620 million senior notes due 2014 to Caa1 from Caa2. Moody's affirmed its $400 million senior secured notes due 2017 at B1 (LGD 3; 33%).

The B3 corporate family and probability of default ratings previously assigned at RSC Equipment Rental are now assigned at RSC Holdings III, along with the SGL-3 speculative grade liquidity rating.

The upgrades reflect the anticipated paydown in the company's second-lien notes that were senior to the unsecured instruments, the agency said.

The company's B3 corporate family and probability of default ratings reflect its high leverage and incorporate the expectation for improved operating performance as a result of increasing demand, Moody's said.

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