S&P affirms WillScot on add-on

S&P said it affirmed the B rating on WillScot Corp.'s senior secured notes due 2023.

The 5 recovery rating is unchanged.

The agency also said it lowered the recovery estimate to 15% from 20% due to the additional secured debt.

WillScot plans to issue $190 million of add-on notes with proceeds used to pay down part of the company's asset-based lending revolving credit facility, resulting in a relatively flat debt level, S&P said.

Following the refinancing, the agency said it expects EBIT interest coverage will improve to the mid-1x range in 2019, from 0.8x in 2018.

This is due primarily to the full-year contribution from the company's August 2018 acquisition of competitor, Modular Space Holdings Inc., S&P said.

The agency also said it expects funds from operations-to-debt will improve to the low-teens percent range from 6.4% over the same period.

WillScot has reported continued progress in integrating the ModSpace assets, along with good integration of its IT systems, the agency said.

S&P also said it began reducing the number of facilities that the combined company no longer needs.

WillScot also began to realize success in introducing ancillary products to its customers, which led to higher average pricing in its core U.S. modular fleet, the agency said.

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