S&P lifts RailAmerica notes

Standard & Poor's said it revised the outlook on RailAmerica Inc. to positive, upgraded its 9¼% senior secured notes to BB from BB-, revised the recovery rating on the notes to 1 from 2 and affirmed its long-term B+ rating.

The company redeemed $74 million of the 9¼% notes on Thursday.

The agency said the outlook revision reflects a strengthening operating environment, improved capital structure following the company's equity issuance and debt reduction following the proposed note redemption.

The ratings on RailAmerica reflect the company's aggressive financial profile, capital intensity and acquisitive growth strategy, S&P said.

The company's position as one of the largest short-line railroad companies in the United States, with a diverse mix of customers and end markets, and its participation in the relatively stable North American freight railroad industry somewhat offset these weaknesses, in the agency's view.

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