Burlington Northern Santa Fe&Units Outlk to Pos by S&P.NEW YORK--(BUSINESS WIRE)--July 16, 1998--Standard & Poor's today revised its outlook on Burlington Northern Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. Corp. (BNSF BNSF Burlington Northern Santa Fe Corporation (railroad) ) and its subsidiaries to positive from stable and affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its ratings on Burlington and its related entities. (see list below). The outlook reflects ongoing successful operation of the combined former Burlington Northern Inc. and Santa Fe Pacific Corp. railroad units, and expectation for modest improvements in the company's financial profile. For the first quarter of 1998, Burlington Northern's carloadings rose 9%, partly reflecting benefits from congestion The condition of a network when there is not enough bandwidth to support the current traffic load. congestion - When the offered load of a data communication path exceeds the capacity. on competitor Union Pacific Corp. (triple-'B'-minus/Negative/--); longer term, Burlington is expected to retain some of this traffic. The ratings of Fort Worth, Texas-based BNSF, are based upon the company's consolidated credit quality, including operations of the Burlington Northern Railroad The Burlington Northern Railroad (AAR reporting marks BN) was a United States-based railroad company operating between 1970 and 1995. History The Burlington Northern was the product of a March 2, 1970 merger comprising the Great Northern Railway, the Northern Santa Fe Railway Co. The ratings reflect a strong competitive position in the relatively low-risk U.S. freight railroad industry, partially offset by moderately aggressive, but improving financial profile. Operational integration of the two railroads has proceeded relatively smoothly compare to the serious problems incurred by competitor Union Pacific Corp. (triple-'B'-minus/negative) following its purchase of Southern Pacific Corp. BNSF is the second largest rail network in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , with 31,000 route miles The number of miles that are spanned by a telecommunications network. It does not include combined wire mileage due to multiple wires or fibers within a single cable or by overlapping segments, just the total geographic distance between cities or other terminal points. . The "end-to-end" combination blended Burlington's strong position in upper midwest The Upper Midwest is a region of the United States with no universally agreed-upon boundary, but it almost always lies within the US Census Bureau's definition of the Midwest and includes the states of Minnesota and Wisconsin, as well as at least the Upper Peninsula of Michigan. grain traffic and Wyoming-based, low sulfur coal transportation with Santa Fe's growing intermodal business, which is concentrated in the important Southern California-Chicago corridor. However, the merger diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Burlington's better profit margins in the coal and grain businesses by adding the growing, but relatively less profitable and more cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. , intermodal business of Santa Fe. BNSF has benefited from serious congestion on Union Pacific's system through increased carloadings and additional trackage track·age n. 1. Railway tracks. 2. a. The right of one railroad company to use the track system of another. b. The charge for this right. access. These benefits along with the initial granting of trackage rights to BNSF from the Union Pacific Corp. and Southern Pacific Rail Corp. merger has strengthened BNSF's relatively weaker competitive position in profitable chemical and west coast forest product transportation. OUTLOOK: POSITIVE BNSF has increasingly operated its merged railroad system without any serious service difficulties and is the most complete, of the U.S. and Canadian railroads, with its the merger integration. Improvement in the financial profile was nominal in 1997, largely due to a weak first half, but additional modest improvements are expected in 1998 and a modest upgrade is possible.
OUTSTANDING RATINGS AFFIRMED
Rating
Burlington Northern Santa Fe Corp.
Corporate credit rating BBB
Commercial paper A-2
Santa Fe Pacific Corp./
Corporate credit rating BBB
Senior unsecured rating BBB
Burlington Northern Inc.
Corporate credit rating BBB
Senior unsecured rating BBB
Burlington Northern and Santa Fe Railway Co.
Senior secured rating BBB
Equipment trust certificates A
Senior secured rating BBB
Great Northern Railway Co.
Corporate credit rating BBB
Senior secured rating BBB
Northern Pacific Railway Co./
Corporate credit rating BBB
Senior secured rating BBB
Atchison Topeka & Santa Fe Railway Co.
Corporate credit rating BBB
Equipment trust certificates A
Copyright 1998, Standard & Poor's Rating Services
CONTACT: Robert Schulz, CFA, New York (1) 212-208-1979
For more information on criteria or subscriptions:
http://www.ratings.standardpoor.com
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion