TEXT - Fitch rates Penske Truck Leasing senior unsecured notes
Jan 17 - Fitch Ratings has assigned a 'BBB+' rating to Penske Truck Leasing Co. LP's (PTL) senior unsecured notes. The notes are comprised of two $500 million tranches with coupons of 2.875% and 4.25% and five- and 10-year maturities, respectively. Fitch does not believe there will be a material impact on the company's leverage as a result of the issuance, as proceeds will be used to repay borrowings on the company's bank revolver and General Electric Capital Corporation (GECC) credit facility. RATING DRIVERS AND SENSITIVITIES PTL currently has a Stable Rating Outlook, which reflects Fitch's expectation for strong liquidity, higher capitalization, and earnings growth in 2013 driven by an increase in contractual full service lease activity, and organic growth in logistics. Fitch believes positive rating momentum could result from demonstrated access to the unsecured markets through market cycles, increased funding diversification, reduced leverage, and operating performance that is consistent with Fitch's expectations and broader industry performance. Negative rating action could be driven by an inability to economically access the unsecured markets, a decline in earnings and/or free cash flow beyond Fitch's expectations, deterioration in asset quality, an inability to realize residual values on used vehicles, a reduction in liquidity or an extended increase in leverage beyond the targeted range. Established in 1988 and headquartered in Reading, Pennsylvania, PTL is a leading provider of full service truck leasing, truck rental, contract maintenance and logistics services. PTL is a partnership between GECC (49.9%), Penske Corporation (41.1%) and Penske Automotive Group (9%). Fitch has assigned the following rating: Penske Truck Leasing Co. LP: --Senior unsecured notes 'BBB+'. Existing ratings for Penske are as follows: Penske Truck Leasing Co. LP --Long-term Issuer Default Rating 'BBB+'; --Senior unsecured notes 'BBB+' The Rating Outlook is Stable.
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