Moody's upgrades Pacer

Moody's Investors Service said it upgraded the ratings of Pacer International Inc., including the corporate family rating to Ba3 from B1, the senior secured term loan due 2010 to Ba3 from B1 and the senior secured revolving credit facility due 2008 to Ba3 from B1.

The outlook has been revised to stable from positive.

The upgrade was prompted by recent improvements in Pacer's operating results concurrent with its ongoing program of debt reduction, the agency said.

These strengths are balanced by Pacer's relatively heavy lease-adjusted leverage, cash flow implications of the company's recently announced dividend and the modest level of tangible assets inherent in the company's agency-oriented business model, the agency said.

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