Moody's upgrades CSX

Moody's Investors Service said it upgraded CSX Corp.’s ratings, including the long-term issuer and senior unsecured ratings, each to A3 from Baa1 and senior unsecured shelf rating to (P)A3 from (P)Baa1.

Concurrently, the agency raised the senior unsecured rating of CSX's wholly owned subsidiary, CSX Transportation, Inc., to A2 from A3.

“The rating upgrades reflect Moody's expectation that CSX will benefit from improvement in service levels contributing to stronger cash flow, despite the current soft economic environment. Additionally, the company will have opportunities to improve its operating margin as network fluidity and service levels rebound, enabling it to transport more volume across its network.

“Lastly, Moody's expects that CSX will prioritize capital deployment toward capital expenditures while balancing both share repurchases and dividends to maintain its conservative financial policies,” the agency said in a press release.

The outlook remains stable.

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