S&P takes RailAmerica ratings off watch
NEW YORK (AP) — Credit ratings agency Standard & Poor's said Wednesday that it is taking RailAmerica's ratings off CreditWatch, meaning a change in the rating is less likely.
The outlook on the ratings, including a "BB-" corporate credit rating, is stable. That rating is below investment grade, or "junk" status.
In July, regional railroad operator Genesee & Wyoming Inc. said it would buy RailAmerica for about $1.39 billion in cash.
S&P said the change follows its review of Genesee & Wyoming's agreement to buy the company. Debt levels will be elevated after the acquisition, but the ratings agency expects the combined company will offset that with cost savings and free cash flow used to pay down debt.
Jacksonville, Fla.-based RailAmerica's shares fell 2 cents to close at $27.42.
Greenwich, Conn.-based Genesee & Wyoming Inc.'s shares rose 40 cents to $64.16.