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ILLINOIS CENTRAL COMMERCIAL PAPER RATED 'F-2' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 5 /PRNewswire/ -- Illinois Central Railroad's (ICR) $100 million 3(a)3 commercial paper program is rated "F-2" by Fitch. The program is 100 percent supported by the company's bank credit facility and will be used for general corporate purposes.
 The rating reflects significant improvements in debtholder protection measures resulting from reduced debt levels and cash flow improvement related to the successful transition to a single-track mainline. In addition, the investment grade rating considers ICR's strong competitive position within its regional market area. The rating also acknowledges the possibility of reduced coal traffic as well as the expectation that competition from barges along the Mississippi River will continue.
 The transition to single track over the past three years along with other changes in its operations has significantly reduced ICR's track maintenance expense and employee headcount. As a result, operating cash flow margins have improved substantially. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to 32 percent in 1992 from 22 percent in 1989. Combined with lower levels of debt, operating improvements have led to steady improvement in debtholder protection measures. Interest coverage rose to 3.52 times (x) in 1992 from 1989's 1.18x, while leverage dropped to 52.7 percent from 98.4 percent over the same period.
 ICR's north/south route system provides a high degree of insulation from railroad competition. Approximately 95 percent of ICR's rail traffic originates and terminates on its rail system. Additionally, approximately 80 percent of ICR's traffic is shipped under contract. Barge transportation, however, continues to present a strong alternative to rail service in many instances. ICR is more vulnerable to barge competition than other railroads because the company's main routes parallel the Mississippi River.
 A large portion of the coal ICR hauls to utilities is subject to Clean Air Act limitations. While implementation of the act will likely reduce ICR's coal traffic, the impact will be mitigated by utility use of scrubbers and blending high and low sulfur coal.
 ICR, a wholly owned subsidiary of Illinois Central Corp. (NYSE: IC), is the ninth largest freight railroad in the U.S. as measured by revenues. The company operates approximately 2,800 miles of mainline track between Chicago and the Gulf of Mexico. ICR transports primarily coal, chemicals, grain and grain products, and paper products.
 -0- 11/5/93
 /CONTACT: Donald H. Powell, 212-908-0570 or Keith B. Foley, 212-908-0572, both of Fitch/
 (IC)


CO: Illinois Central Railroad; Illinois Central Corp. ST: Illinois IN: TRN SU: RTG

LG -- NY024 -- 1168 11/05/93 10:42 EST
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Publication:PR Newswire
Date:Nov 5, 1993
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