Standard & Poor’s Ratings Services said is assigned its BBB+ issue rating to Finning International’s proposed CD $600 million (U.S. $596 million) senior unsecured medium-term notes, which will be issued in two tranches: CD $350 million due June 2018 and CD $250 million due September 2013.
The proceeds will be used to repay existing debt, including the CD $200 million MTNs maturing June 2008 and short-term commercial paper.
S&P said the ratings on Finning continue to reflect its strong business relationship with Caterpillar Inc., a favorable operating environment, improved financial risk profile, and progress in rationalizing its U.K. business. These strengths, however, are partially offset by Finning’s dependence on the cyclical mining and energy sectors for revenue and the large capital spending needed to support its growth in the equipment rental business.
S&P said it expects Finning’s leverage and coverage measures should remain at similar levels through strong cash-flow generation.
Based in Vancouver, B.C., Finning International, the world’s largest Caterpillar dealer, is No. 10 on the RER 100.
