Moody’s rates Terex facility Ba2

Moody’s Investors Service said it rated Terex Corp.’s new bank credit facility Ba2, upgraded its senior unsecured rating to B2 from B3 and changed the outlook to stable from negative. Concurrently, the agency affirmed the B1 corporate family rating and B1-PD probability of default rating.

“The secured debt rating of Ba2 takes into account the priority of claim the secured holders have with their first-lien position, as well as the relative amount of unsecured claims which are in a first loss position. The senior unsecured rating was upgraded to B2 to reflect the improved recovery prospects of the senior unsecured class because of the lowered overall debt amount and the change in the composition of secured and unsecured claims with the new financing. Moody's will withdraw the ratings on Terex's existing debt obligations that are being refinanced at the close of the transaction,” Moody’s said in a press release.

The outlook change reflects Moody's view that Terex will continue deleveraging from currently high levels as revenue and profitability rebound from a challenging 2020.

“However, Moody's view does not anticipate a rapid snap-back in demand for Terex's specialized equipment, but rather gradual improvement as construction activity picks up and equipment utilization rates at equipment rental companies approach pre-recession levels,” the agency said.

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