The short- and long-term outlook for fleet lessors LeasePlan Corp. and Wheels Inc. is stable for any upcoming corporate bond offerings, according to a Fitch Ratings review.

Fitch affirmed LeasePlan's Issuer Default Rating (IDR) at A-/F2, while affirming Wheels Inc.'s IDR at the higher A/F1.

Fitch cited a strong used-vehicle market and Wheels Inc.'s preference for open-end leases in its rating.

"Commercial fleet lessors continue to benefit from strong used vehicle price, which helps to mitigate residual value (RV) exposure on closed-end leases," according to Fitch. "However, used vehicle prices have moderated from historical highs experienced over the last several years due to increased vehicle production rates and greater retail lease penetration boosting supply."

Fitch also noted that "Wheels has minimal RV exposure, as its portfolio is almost entirely comprised of open-end leases, which effectively transfers RV risk to the lessee."

Read the full Fitch release here.

0 Comments