3 evaluation agencies have abolished Finance Patriot Rail in the midst of a change in debt structure
The Shortline Patriot Rail operator, a business name on Rail, goes to debt for refinancation, which will make all three grade rating agencies abolish on its edition.
Three ratings of the same questions and the company is unusual by the same edition. Companies are often satisfied with one or maybe two. But all three were announced this week.
The debt issue is $ 440 million to pay an existing debt, pay dividend to shareholders and cover transactions fees. The rating agencies also took into account Patriot plan to replace more than $ 40 million with a loan loan with a five-year, $ 50 million in higher RCF secured.
Analysis of the grade posted by Moody’s (Nyse: MCO)Fitch grades and S&P Global Ratings (Nyse: spgi) They usually do not involve information such as income or private revenue revenue. But Moody’s report went to the Patriot Rail revenue amount of $ 198 million in 2024. S&P said he expects Patriot Rail revenue to increase 4% to 6% this year.
The railroad ratings on the railway rail stretched on three incisions. What S&P calls its long-term record label is set on B-, confirming its existing rating. Moody’s was an equivalent of a note of a larger on B2 on a corporate family assessment – also a certificate.
Fitch was the highest on B+ for a default issuer. It was the first grade on the Patriot Rail of Fitch.
There was an unusual difference with the real debt matter. Fitch gave a significantly higher BB rating, three commas above B2 grades from Moody’s and four above B- from S&P. When the borrower is rated by multiple rating agencies, the grades are harder to be equal or at the very least.
All ratings are deep in the territory of non -investment.
The Patriot Rail website cites 31 individual short railway -owned railways. Most of them are in the Middle West. The company business ticket can be found here.
Moody’s described the revenue of the Patriot Rail “Scale” as “modest”, which contains a certain level of concentration in moving packaging and paper. He also said that Patriot has less competition with intermodal railways, so he is less exposed to a truck competition.
In a discovery about his finances, Moody’s said Patriot has a “strong” operating margin he expects to remain above 25%.
Fitch said he expects a free cash flow to range with low low-two-digit rates, which is about $ 15 million to $ 30 million.
Fitch described Patriot’s network as “established” and “geographically diverse”. In addition to noting her “limited exposure to” intermodal competition and expansion of transportation, Fitch said Patriot’s turnover “focused on domestic” and has a “moderate concentration of a customer and the end market compared to other operators.” Fitch said Patriot had “risk profiles of operating and cash flows to be in line with the BB category”, which is a reason for her rating was the largest among the three agencies for the real matter of debt.
