S&P rates RailAmerica loan BB

Standard & Poor's said it assigned its BB secured debt rating and 1 recovery rating to RailAmerica Inc.'s proposed $450 million amended and restated senior secured facilities, which consist of a $100 million revolver maturing in 2010 and a $350 million term loan maturing in 2011.

At the same time, S&P revised its outlook on RailAmerica to positive from stable and affirmed its BB- corporate credit rating on the company.

The credit facilities, along with proceeds from a recently completed asset sale, will be used to repay certain existing debt, provide for working capital purposes, and fund permitted acquisitions.

S&P said ratings reflect RailAmerica's aggressive (albeit moderating) debt leverage and the potential for debt-financed acquisitions, partly offset by its position as the largest owner and operator of short-line (regional and local) freight railroads in North America and the favorable risk characteristics of the U.S. freight railroad industry.

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