Moody’s cuts Con-way debt to B3, will withdraw

Moody's Investors Service said it downgraded Con-way Inc.’s senior unsecured rating debt to B3 from Baa3.

This completes the review for downgrade initiated on Sept. 11 upon the announcement that Con-way entered into an agreement to be acquired by XPO Logistics, Inc. (corporate family rating B1, stable).

The outlook is stable.

Moody's expects to withdraw all ratings of Con-way.

The B3 senior unsecured rating reflects the B1 corporate family rating of XPO and Moody's view that the Con-way notes would be more junior to XPO's senior unsecured notes in the liability waterfall. This is because (a) Con-way provides an upstream guarantee on XPO's senior unsecured notes (as do all of XPO's domestic subsidiaries); but (b) neither XPO nor any of its subsidiaries guarantee the Con-way notes; and (c) any residual value from XPO's ownership interest in Norbert Dentressangle, or other subsidiaries, is likely to benefit holders of the XPO senior unsecured notes ahead of holders of the Con-way notes.

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