Fitch Expects to Rate Penske Truck Leasing's Senior Unsecured Notes 'BBB+'

CHICAGO--(BUSINESS WIRE)--Fitch Ratings expects to rate Penske Truck Leasing Co. LP's (PTL) senior unsecured notes 'BBB+'. The size of the notes is expected to be up to $2 billion and have 3.5 and 5.5 year maturities. 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 2012 driven by an increase in commercial rental volumes, higher vehicle sale gains, improvement in contractual 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 expects to assign 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.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Finance and Leasing Companies Criteria' (Dec. 12, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Finance and Leasing Companies Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=659834

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