Credit FAQ: What's Ahead For The Railroad Sector In 2012? Dec 11
Standard & Poors, December 2011
Abstract
Standard & Poor's Ratings Services expects the credit quality of North American railroads it rates to remain mostly stable through 2012. In our view, Class I railroads--Burlington Northern Santa Fe LLC, Canadian National Railway Co., Canadian Pacific Railway Ltd., CSX Corp., Kansas City Southern, Norfolk Southern Corp., and Union Pacific Corp., (classification is based on operating revenue)--should fare well, despite our economist's forecast of a weak economy. Standard & Poor's currently estimates real U.S. GDP growth of 1.8% in 2011 and 1.7% in 2012 with 35% likelihood of another recession. Still, we anticipate stable to modestly improving railroad volumes, increasing prices, ongoing expense control, and improvements in operating efficiency. These should result in relatively stable earnings and cash flow for...
Companies mentioned in this report are: CSX Corp.,Canadian National Railway Co.,Kansas City Southern,Union Pacific Corp.,Norfolk Southern Corp.,Burlington Northern Santa Fe LLC,Canadian Pacific Railway Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
CSX Corp.,Canadian National Railway Co.,Kansas City Southern,Union Pacific Corp.,Norfolk Southern Corp.,Burlington Northern Santa Fe LLC,Canadian Pacific Railway Ltd.
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