Moody's rates Onsite loans B1

Moody's Investors Service said it assigned a provisional B1 rating to Onsite Rental Group Operations Pty. Ltd.'s proposed senior secured term loan B and revolving debt facility and a provisional B1 corporate family rating to parent company Onsite Rental Group Pty. Ltd. The outlook is stable.

The proposed debt will comprise a first-lien senior secured term loan B at a U.S. dollar equivalent of A$388 million with a maturity of seven years and a five-year senior secured revolving credit facility of around A$40 million. Proceeds will be used principally to repay existing debt, provide working capital support and fund a return of capital to its shareholders of around A$115 million.

The agency said Onsite's provisional B1 ratings reflect the inherently cyclical nature of the equipment rental industry, which is in turn exposed to the level of construction activity in the economy; the company’s high financial leverage and its evolving capital structure.

Despite challenging market conditions, Moody’s expects Onsite's revenue profile to exhibit some resilience based on its established clientele, diversified asset fleet and the solid growth it has achieved over the past five years.

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