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YRC is reviewed by Moody's

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  • YRC is reviewed by Moody's

    Once again YRC hangs from the bottom rungs of financial stability.

    YRC gets review at Moody’s, but no rating tweak was at stake
    Heavily debt-burdened YRC Worldwide has had its debt rating reviewed by Moody’s Investors Service, but the review wasn’t empowered to do anything about it in any event.
    Still, given the less-than-truckload (LTL) carrier’s major debt load, and the fact that it received $700 million in federal government support since the last review by Moody’s, any action, or lack thereof, by a ratings agency is significant.
    YRC now carries a Caa1 rating from Moody’s, which is just a few steps above the lowest rating in the Moody’s scale before the bottom-rung rating given to entities that default.

    What Moody’s announced Tuesday is that it had completed a “periodic review” of YRC. The “portfolio review … reassessed the appropriateness of the ratings in the context of [Moody’s] methodologies, recent developments and a comparison of the financial and operating profile to similarly rated peers.”
    What it did not involve was a ratings committee, which is the only way for a borrower to have its rating increased or decreased.
    That isn’t to say that the release accompanying the end of the YRC portfolio review had nothing to say. The statement noted Moody’s “thin operating margins and substantial debt balance, when including Moody’s adjustments related to underfunded pension obligations.”

    Moody’s Caa1 rating was already affirmed soon after the company received the $700 million loan from the Treasury Department. (Moody’s rival S&P Global Ratings gave it an upward boost). While the amount seemed enormous, it was not enough to move the needle on YRC’s debt rating.
    https://www.freightwaves.com/news/yr...k-was-at-stake
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