Fitch: Commercial Fleet/Truck Lessors Keep Rolling

CHICAGO--(BUSINESS WIRE)-- The commercial fleet and truck leasing sectors continue to exhibit strong asset quality and sufficient liquidity, reducing the potential for credit and economic risks to materially impact ratings, according to a Fitch Ratings report.

Fitch recently affirmed the long-term Issuer Default Ratings (IDRs) of four publicly rated commercial fleet and truck lessors, including LeasePlan Corporation N.V. (LeasePlan, 'A-'), Penske Truck Leasing Co. L.P (Penske, 'BBB+'), Ryder System, Inc. (Ryder, 'A-') and Wheels, Inc. (Wheels, 'A'). The Rating Outlooks for Penske, Ryder and Wheels are Stable, while LeasePlan remains on Rating Watch Negative reflecting the ongoing sale by the company's present owners to a consortium of investors, which could impact capitalization and/or liquidity levels.

Fitch's affirmations reflect the sectors' generally stable operating profiles, well-managed credit risks, limited sensitivity to rising interest rates, sufficient liquidity and appropriate leverage.

The ratings are constrained by the inherent cyclicality and monoline nature of the auto rental and truck and fleet leasing businesses and their reliance on wholesale funding sources.

Industry performance is supported by consistent core operating cash flow generation, continued customer demand, stable lease rates and improved operating leverage. Recent portfolio growth for commercial fleet and truck lessors reflects a shift toward fleet management outsourcing due to rising costs of fleet ownership.

Used vehicle prices continue to exhibit strength in 2015, which helps mitigate residual value exposure on closed-end leases. However, Fitch expects vehicle prices to normalize toward the end of 2015 and into 2016.

The full report 'Commercial Fleet Lessors: Industry Snapshot' is available at 'www.fitchratings.com' or by clicking on the link.

Additional information is available at 'www.fitchratings.com'.

Commercial Fleet Lessors: Industry Snapshot

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872608

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151026006107/en/

Fitch Ratings
Johann Juan
Director
+1-312-368-3339
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Nathan Flanders
Managing Director
+1-212-908-0827
or
Media Relations:
Hannah James, +1 646-582-4947
[email protected]

Source: Fitch Ratings

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