S&P affirms Pacer

Standard & Poor's said it affirmed its BB corporate credit rating on Pacer International Inc.

The agency said that the affirmation followed the freight transportation company's announcement that it has increased its share repurchase authorization by $100 million, adding that it believes that healthy cash generation and currently strong cash flow protection measures should allow Pacer to pursue share repurchases and still maintain credit protection measures within acceptable levels.

Ratings reflect Pacer's exposure to cyclical and competitive pressures, especially in its logistics business, a somewhat aggressively leveraged balance sheet that includes significant operating lease obligations, the potential for acquisitions and the likelihood of profit pressures over the near term, S&P said.

Partially offsetting these challenges are the company's solid niche position in the freight transportation and logistics industry, a somewhat variable cost structure and ongoing efforts to improve productivity, the agency noted.

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