Moody's rates Overnite loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to Overnite Transportation Co.'s $250 million amended and restated credit agreement and confirmed the senior implied rating at Ba1. Moody's also changed the outlook to positive.

The change in outlook to positive takes into account the better-than-expected financial results, Moody's expectation of good near-term performance given the strong market for trucking services, Overnite's lowered debt levels and limited requirements for ongoing contributions to its underfunded pension obligation, and the strong credit metrics of interest coverage and free cash flow to debt.

Moody's said the rating could be upgraded if: debt is further reduced to a sustainable level in the range of $75 million, with a ratio of debt to EBIT of not more than 1:1; the operating ratio remains in the low 90% range with solid free cash flow; there is continued progress in addressing the remainder of the underfunded pension plan; and, the currently strong service levels of on-time delivery and low damage claims are maintained as demand continues to increase.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.