Moody's rates RailAmerica notes B1

Moody's Investors Service said it has assigned a B1 rating to RailAmerica, Inc.'s proposed $700 million of senior secured notes due 2017.

At the same time, Moody's said it has assigned a B1 corporate family rating and a B1 probability of default rating to the company, and a speculative-grade liquidity rating of SGL-3.

The outlook is stable.

According to the agency, RailAmerica's B1 corporate family rating reflects the company's high debt levels relative to its size, and the expectation that debt levels will only begin to moderate when macroeconomic factors affecting the company's demand experience significant improvement. Moody's anticipates that freight volumes at RailAmerica will decline through 2009, similar to trends expected in the entire railroad sector, which will result in softening levels of revenue over the near term.

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