Tuesday 14 November 2017 by FIIG Research Company updates

Company updates – Emeco, Hertz, James Hardie, Perpetual Trustee, Pro-Pac, zipMoney

This week, rating action on Emeco and James Hardie, Pro-Pac completes merger with IPG, Perpetual Trustee RMBS added to the DirectBond list, 3Q17 earnings update from Hertz and zipMoney notes tracking well

Fitch upgrades Emeco’s long term issuer default rating

Fitch Ratings (Fitch) has upgraded Emeco Holdings Limited’s (Emeco) long term issuer default rating to B- from CCC. The rating outlook is stable.

The upgrade reflects Fitch's view that the mining services company's financial profile will continue to improve as it realises benefits from its recently completed merger with Andy's Earthmovers (Asia Pacific) Pty Ltd and Orionstone Holdings Pty Ltd. This is alongside Emeco’s equity funded acquisition of Force Equipment Pty Ltd, which is due to be completed at the end of November 2017. Key rating drivers were:

  • Improving rental market conditions
  • Commitment to reduce leverage
  • Integration risk remains

Hertz – 3Q17 earnings update

Hertz continues to execute on a company turnaround with a good quarter of operational results.

The update on Hertz’s 3Q17 earnings is available here.External link - opens in a new window 

James Hardie ratings affirmed

Fitch affirmed the ratings for James Hardie International Group Ltd (James Hardie) and its subsidiaries, including the company’s BBB- issuer default rating. The rating outlook remains stable. This follows the announcement that James Hardie Industries plc agreed to acquire German based Xi (DL) Holdings GmbH and its subsidiaries (including Fermacell GmbH). Key rating drivers were:

  • Acquisition of Fermacell
  • Leverage projected to increase
  • Growth strategy/capacity expansion plans
  • Leading market position
  • Geographic, product and end-market diversity
  • Asbestos payments (Asbestos Injuries Compensation Fund)
  • Capital allocation strategy

New DirectBond from Perpetual Trustee Company Limited

We have reviewed and approved the residential mortgage backed securities, Harvey Trust Series 2017-1, issued by Perpetual Trustee Company Limited on 21 June 2017.

This security is available to wholesale clients only with a minimum parcel size of AUD50,000 and AUD1,000 thereafter.

Pro-Pac completes transformational merger with IPG

On 6 November 2017, IPG became a wholly owned subsidiary of Pro-Pac Packaging Limited (Pro-Pac). IPG is Australia’s largest specialist manufacturer and distributer of flexibles, film, wrap and associated products with leading positions in key markets. In accordance with the terms of the merger, Mr Rupert Harrington, the executive chairman at Advent Partners, was appointed as a director of Pro-Pac.

zipMoney tracking well

zipMoney 2017-1 Trust Class B notes are performing within the range of our expectations. We expect the transaction to continue performing well due to a diversified receivables pool as well as the backing of a strong servicer.

The full update is available here.External link - opens in a new window Note the content requires a FIIG login.

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