Moody's rates Sunstate notes B3

Moody's Investors Service said it assigned a B3 long-term rating to Sunstate Equipment Co. LLC's proposed $175 million second-priority senior secured notes due 2012.

The rating agency also assigned a B2 senior implied and a Caa1 senior unsecured issuer rating to the company. The outlook is stable.

Moody's said the B3 rating of the second-lien notes, which will have Sunstate Equipment Co. (a holding company that is a wholly owned subsidiary of Sunstate) as a co-issuer, reflects the junior position relative to the security interest of the $150 million first-lien facility on substantially all of Sunstate's property and equipment.

The ratings incorporate the belief that Sunstate will strengthen its debt protection measures as the U.S. construction rental market continues to recover, the company will not likely make any further member distributions beyond what is currently proposed, excess cash could be used for debt repayment and the completion of the new $175 million second-lien notes will afford Sunstate with a simplified capital structure by redeeming the equity sponsor's investment, Moody's said.

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