Truckload carrier Western Express plans to raise $275 million by selling eight-year securities and use the funds to pay down debt and to buy new trucks.
Standard & Poor's Rating Service assigned a B- rating to the senior secured notes and a B- corporate credit rating to the Nashville, Tenn.-based trucking company.
"The ratings on Western Express reflect the truckload carrier's highly leveraged financial profile," Standard & Poor's said, as well as the capital intensive nature of trucking.
The company's midsize market position and customer diversity partially offset those weaknesses, the credit rating firm said. Western Express' "outlook is stable," S&P said.
"We expect earnings and operating results to improve as tonnage improves and the pricing environment stabilizes in the truckload sector," the firm said in a statement.
The offering is the first by Western Express since it attempted a $90 million initial public offering in 2005. That IPO was postponed "indefinitely" as the economy weakened.
Donna and Wayne Wise founded Western Express in 1991. It offers dry-van truckload and flatbed service, as well as dedicated carriage and logistics services.
It offers nationwide service, but specializes in expedited truckload and intermodal service linking the eastern United States and the West Coast.
Sales at Western Express fell about 26 percent last year to $439 million, according to estimates prepared by SJ Consulting Group for The Journal of Commerce.
It ranked 39th on The Journal of Commerce list of Top 50 Trucking Companies.
A full report on the top 50 carriers will be published in the April 12 issue of The Journal of Commerce and will be available online to JOC members.
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