S&P slices Nesco to CCC+

S&P said it downgraded Nesco Holdings Inc. and its subsidiary Capitol Investment Merger Sub 2 LLC to CCC+ from B.

Also, the agency slashed the rating the subsidiary’s second-lien notes to CCC from B and revised the recovery rating to 5 from 4.

The outlook is negative.

“The downgrade and negative outlook reflect the increasing risk of tightening liquidity given our expectation for slowing demand in specialty equipment rental and sales during a recession. We believe limited availability on Nesco's asset-based lending (ABL) facility combined with our expectation of weak cash flow generation could cause additional liquidity concerns over the next 12 months if economic conditions worsen,” S&P said in a press release.

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