As well as company-specific considerations, the moves also reflect what Fitch described as “better-than-expected performance” following the initial wave of lockdowns in the second quarter of 2020, and its expectations that financial performance will remain broadly stable in 2021. That’s backed up by improving demand for equipment, particularly in the construction and public sectors.

UK-based Ashtead Group is now rated BBB-/Stable, Boels Topholding of The Netherlands is at BB-/Stable and the Luxembourg company Modulaire Investments is at B/Stable, with the differences accounted for by Fitch Ratings’ assessment of the companies’ profile and capital & leverage.

Overall, Fitch said that while rated equipment rental companies are increasingly diversifying in terms of end users, exposure to the construction industry remains “significant”, and the closure of sites during the first lockdown negatively affected both utilization rates and revenue generation in the second quarter of last year.

That was though contained in the case of Modulaire by the longer-term rental contracts it has in place, while volatility was contained to some extent by the complexity of removing hired equipment for a short period of time. Fitch also said that utilization rates have remained higher in subsequent lockdowns due to governments allowing construction sites to remain open.

Fitch noted that the pandemic has highlighted equipment rental and leasing companies’ ability to deleverage in an economic downturn, with capital expenditure commitments modest compared to other rental and leasing sectors. That allows businesses to move more quickly to reduce capex, leading to an improvement in free cash flow, with Fitch citing the example of Ashtead reducing overall capital expenditure by 61% in the 12 months to the end of January 2021, which lead to a doubling of free cash flow to £1.5 billion.