Fitch assigns Forward Air BB-

Fitch Ratings said it assigned a first-time long-term issuer default rating of BB- to Forward Air Corp. and Clue Opco, LLC (collectively Forward Air or FWRD). Fitch also assigned Clue Opco, LLC's senior secured credit facilities and notes BB/RR3 ratings. The outlook is stable.

“The ratings for FWRD reflect the company's large and established premium less-than-truckload operation as well as the meaningful scale of Omni Logistics (OMNI) in the freight forwarding market. The ratings also consider FWRD's forecast post-acquisition positive FCF profile (annual post-dividend FCF around $100 million-$225 million), adequate liquidity position, and improving leverage and interest coverage metrics in the low/mid-3x and mid-3x-to-low-4x range, respectively, in FY 2024-2025, consistent with BB- level transportation credits in FY2024.

“Fitch currently forecasts an improvement in market conditions in 2024, as well as execution on expected cost synergies and internal growth initiatives to support improvements in EBITDA and FCF. Fitch also incorporates management's stated capital allocation priorities of debt repayment and intentions to manage company-calculated leverage under 2x,” the agency said in a press release.

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