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Fitch lifts United Rentals loan to BB
Fitch Ratings said it upgraded United Rentals (North America) Inc.'s senior secured credit facility to BB with a recovery rating of RR1 from BB- and affirmed its long-term issuer default rating at B+ and the long-term issuer default rating of parent company United Rentals Inc. at B.
United Rentals (North America)'s B+ senior unsecured debt rating and B subordinated debt rating were affirmed, but the recovery ratings were downgraded to RR4 from RR1 for the senior debt and to RR6 from RR3 for the subordinated debt.
The outlook was revised to stable from negative.
The agency did an analysis of the recovery on United Rentals' debt with an updated scenario that includes a more fully drawn ABL facility. The new ratings reflect superior recovery prospects for the secured debtholders.
Fitch said the affirmation reflects United Rentals' ability to maintain sufficient cash flow, a stable liquidity profile and access to the capital markets during 2009 despite a significant downturn within the equipment rental industry.
The company's overall profitability did weaken due to the larger-than-anticipated decline in revenues over the past year, the agency said, but revenue decline was partially offset by a reduction in the scale of operations and size of the rental equipment portfolio and by significant cost-cutting measures.
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