S&P boosts Ahern Rentals

S&P said it raised its rating for Ahern Rentals Inc. to CCC- from CC and its second-lien notes to CC from C. The 5 recovery rating on the notes is unchanged.

“Ahern's termination of the proposed exchange offer staves off default temporarily. We would have viewed the proposed exchange offer as a distressed exchange, tantamount to a default. If the company had completed the transaction, bondholders would have received less value than originally promised. This is because the maturity of the new notes would have been three years beyond the original May 2023 maturity and bondholders would not have received offsetting compensation in our view,” the agency said in a press release.

That said, Ahern now has time to explore its options; however, S&P warned the issuer could default on one or more of its debt issues by February.

The outlook is negative.

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