Shortline Operator Patriot Rail, the business name of Na Rail, goes to the debt markets for refinancing, allowing all three ratings agencies to weigh its issue.
Three reviews about the same problem and company under the same problem are unusual. Companies are often satisfied with one or perhaps two. But all three were published this week.
The debt problem in question is an offer of $ 440 million to pay the existing debt, to pay a dividend to shareholders and cover transaction costs. The ratings agencies also took into account Patriot’s plan to replace a senior senior -secure rotating rotating credit facility of $ 40 million with a five -year -old, $ 50 million senior secured RCF.
Rating analyzes published by Moody’s (NYSE: MCO), Fitch Ratings and S&P Global Ratings (NYSE: SPGI) normally do not contain any information such as income or income for private companies. But the Moody report hung the turnover of Patriot Rail at $ 198 million in 2024. S&P S&P said that the turnover of Patriot Rail will grow by 4% to 6% this year.
The reviews of the NA -Rail agencies extended over three notches. What S&P calls his long-term issuer rating was determined on B-, which confirmed its existing assessment. Moody’s was the equivalent of one notch higher on B2 on his business family rating – also a confirmation.
Fitch was the highest at B+ for the standard assessment of the issue. That was a first assessment on Fitch Patriot Rail.
There was an unusual divergence about the assessment of the actual debt problem. Fitch gave a remarkably higher assessment of BB, three notches above the B2 assessment of Moody’s and four above the B from S&P. When a borrower is assessed by multiple reviews, the reviews are usually equivalent or a maximum of one apart.
All reviews are deep in non-investment of the area.
The Patriot Rail website contains 31 individual shortline trailing roads that are owned by the company. The majority of them are in the midwest. A map of the company’s activities can be found here.
Moody’s described the income of Patriot Rail “Scale” as “modest”, with a certain level of concentration in moving packaging and paper. It also said that Patriot has less competition with intermodal railways, so it is less exposed to truckload computer.
In disclosure about his finances, Moody’s said Patriot has a “strong” operational margin that it expects to stay above 25%.
Fitch said that the free cash flow in the high-numerical figure will be up to a low-double-digit range, which amounts to around $ 15 million to $ 30 million.
Fitch described the Patriot network as ‘established’ and ‘geographically diverse’. In addition to noticing the “limited exposure” to intermodal competition, and by expanding trucks, Fitch said that the traffic of Patriot is “domestic” and has “moderate customer and end market concentration towards other operators.” Fitch said that Patriot had “operational and cash current profiles to be more consistent with the BB category”, a possible reason why the rating was the highest among the three agencies for the actual debt problem.
