S&P rates Horizon Lines corporate credit B

Standard & Poor's said it assigned its B corporate credit rating to Horizon Lines Inc. following the completion of its $125 million initial public offering. Senior unsecured debt is rated CCC+.

Horizon Lines Inc., a new entity created as a result of the IPO, is the ultimate parent company of Horizon Lines Holding Corp. and Horizon Lines LLC, which S&P already rates. The company announced its intention to initiate an IPO in March 2005, with the proceeds being used to repay debt at its subsidiaries. The effects of the transaction had already been factored into the ratings and outlook.

The outlook is stable.

S&P said ratings on Horizon Lines Inc. reflect its very aggressive financial policy, high debt leverage, participation in the capital-intensive and competitive shipping industry, and aging fleet. Positive credit factors include barriers to entry afforded by the Jones Act (which applies to intra-U.S. shipping) and stable demand from the company's diverse customer base across its various markets.

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