S&P affirms Horizon Lines

Standard & Poor's said it affirmed its ratings on Horizon Lines Holding Corp. and subsidiary Horizon Lines LLC, including its B corporate credit rating, following the company's initial public offering filing on March 1.

S&P also affirmed Horizon Lines Holding Corp.'s B senior secured debt rating and CCC+ senior unsecured debt rating and Horizon Lines LLC's B senior secured bank loan rating and CCC+ senior unsecured debt rating.

Proceeds from the IPO will be used to pay a $71 million special dividend to existing shareholders, reduce up to $96 million of debt and redeem the $61 million of outstanding preferred stock. The outlook is stable.

While Horizon Lines' financial flexibility improves somewhat by accessing the public equity market, S&P said its pro forma lease-adjusted debt leverage continues to be high and the company's financial policy remains very aggressive.

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