Standard & Poor’s Ratings Service revised its long-term rating outlook on Phoenix-based Sunstate Equipment Co. from stable to positive, Reuters reports. The outlook revision reflects improvement in Sunstate’s credit metric, which, S&P said, exceeds ratios comparable for the current rating, as conditions in the equipment rental sector continue to improve despite low construction spending activity.
S&P said it expects Sunstate’s operating performance to improve gradually, adding that the company’s strong regional presence in the southwestern U.S., its focus on customer service and good EBITA margin tempers its capital-intensive equipment purchases and high leverage.
S&P’s economists expect that rental markets will continue to outpace nonresidential construction spending, with contractors and industrial customers relying more on rentals rather than purchasing their own equipment. They added that Sunstate’s liquidity is “adequate” and reiterated that the company would be able to meet its near-term needs, as a result of a recent refinancing that provides flexibility and pushes out maturities “comfortably” over several years.
Sunstate Equipment is No. 14 on the RER 100.