S&P Slashes YRC’s Credit Rating
Credit rating agency Standard & Poor’s on Thursday lowered YRC Worldwide’s corporate credit rating to “BB” from “BB+,” and said that the carrier’s slumping earnings could hurt its ability to fulfill credit obligations if the current softness in the trucking industry persists.
“The rating actions reflect heightened concerns over the company’s
refinancing risk, earnings performance, and liquidity position over the next
year, given the slowing U.S. economy and continuing pressures in the trucking
sector,” S&P credit analyst Anita Ogbara said in a statement.
S&P also said it has placed YRC on CreditWatch with negative implications, and noted that while it expects the CreditWatch to be resolved “pending review YRC's liquidity and financial position, operating prospects, and financial outlook,” the carrier’s rating could be lowered further “if financial results fail to improve.”
On S&P’s rating scale, debt rated lower than “BBB” is not considered investment grade.
YRC Worldwide, Overland Park, Kan., is the largest U.S. less-than-truckload carrier. In 2007, the company posted a $638.4 million loss, due in part to a $782 million write-off of goodwill associated with prior acquisitions.
The carrier ranks No. 4 on the Transport Topics 100 list of the largest U.S. and Canadian for-hire carriers.
