Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

Transportation

Amsted Industries Inc., B2; probability-of-default rating: B2; revolver, term loan and delayed-draw term loan, upgraded to Ba3 from B1, LGD3, 30%; global notes, downgraded to Caa1 from B3, LGD5, 80%.

Gainey Corp., B2; probability-of-default rating: B3; revolver and term loan, B2, LGD3, 37%.

Global Petroleum, Inc., B2; probability-of-default rating: B2; term loan, B2, LGD4, 55%.

Great Lakes Dredge & Dock Corp., B3; probability-of-default rating: B3; revolver and term loan, upgraded to Ba3 from B2, LGD2, 17%; senior subordinated notes, upgraded to Caa1 from Caa2, LGD5, 78%.

H-Lines Finance Holdings Corp., B2; probability-of-default rating: B2; senior discount notes, upgraded to Caa1 from Caa2, LGD6, 94%. Horizon Lines LLC, revolver and term loan, upgraded to Ba2 from B2, LGD2, 20%; senior unsecured notes, B3, LGD4, 69%.

Kansas City Southern, B2; probability-of-default rating: B2; preferred stock, upgraded to Caa1 from Caa2, LGD6, 100%; senior unsecured shelf, provisional B3, LGD4, 69%; subordinated shelf, provisional Caa1, LGD6, 97%. The Kansas City Southern Railway Co., revolver and term loan, upgraded to Ba2 from B1, LGD2, 21%; senior notes, B3, LGD4, 69%; senior unsecured shelf, provisional B3, LGD4, 69%; subordinated shelf, provisional Caa1, LGD6, 97%.

Laidlaw International, Inc., Ba2; probability-of-default rating: Ba3; revolver and term loans, upgraded to Ba1 from Ba2, LGD2, 26%; unsecured notes, B1, LGD5, 76%.

Ozburn-Hessey Holding Co., LLC, B3; probability-of-default rating: B3; revolver and term loan, upgraded to B1 from B3, LGD2, 29%.

Pacer International, Inc., Ba3; probability-of-default rating: Ba3; revolver and amortizing term loan, upgraded to Ba2 from Ba3, LGD2, 28%.

Petro Stopping Centers LP, B3; probability-of-default rating: B3; revolver and term loan, upgraded to Ba3 from B1, LGD1, 8%; senior secured notes, B3, LGD4, 54%.

Quality Distribution LLC, B3; probability-of-default rating: B3; revolver and term loan, upgraded to Ba3 from B2, LGD2, 16%; senior unsecured floating-rate notes, upgraded to B3 from Caa1, LGD4, 52%; senior subordinated notes, Caa2, LGD5, 84%.

RailAmerica Transportation Corp., Ba3; probability-of-default rating: B1; term loan and revolver, upgraded to Ba2 from Ba3, LGD2, 26%.

Sirva Worldwide, Inc., B2; probability-of-default rating: B2; revolver and term loan, B2, LGD3, 46%.

Standard Steel, LLC, B2; probability-of-default rating: B2; revolver, term loan and delayed draw term loan, B2, LGD3, 45%; second-lien term loan, Caa1, LGD6, 93%.

Transport Industries, LP, B2; probability-of-default rating: B3; revolver and term loan, upgraded to B1 from B2, LGD2, 26%.

TravelCenters of America, Inc., B1; probability-of-default rating: B2; term loan and revolver, B1, LGD3, 37%.

Trinity Industries, Inc., Ba2; probability-of-default rating: Ba2; revolver and senior notes, upgraded to Baa3 from Ba2, LGD2, 22%; convertible subordinated notes, Ba3, LGD5, 71%. Trinity Industries Leasing Co., notes, upgraded to Baa2 from Ba1, LGD1, 7%.

U.S. Shipping Partners LP, B2; probability-of-default rating: B2; revolver, term loan and delayed draw term loan, B1, LGD3, 37%; senior notes, Caa1, LGD5, 89%.

YRC Worldwide, Inc., Ba1; probability-of-default rating: Ba1; floating-rate and convertible notes, revolver, Ba1, LGD4, 53%. Roadway LLC, senior notes, Ba1, LGD4, 53%; YRC Regional Transportation, Inc., senior notes, Ba1, LGD4, 53%.

AMR Corp., B3; probability-of-default rating: B3; senior unsecured notes, Caa2, LGD5, 81%;

Unsecured shelf, provisional Caa2, LGD5, 81%. American Airlines Inc., revolver and term loan, upgraded to B1 from provisional B2, LGD2, 27%; industrial revenue bonds, Caa2, LGD5, 81%.

Evergreen International Aviation Inc., B2; probability-of-default rating: B2; first-lien term loan and revolver, B1, LGD3, 33%; second-lien term loan, Caa1, LGD5, 79%.

United Air Lines, Inc., B2; probability-of-default rating: B2; term loan and revolver, B1, LGD3, 43%.

US Airways Group Inc., B3; probability-of-default rating: B3; term loan, B2, LGD3, 39%; industrial revenue bonds, upgraded to Caa2, LGD5, 89%; industrial revenue bonds guaranteed by Continental Airlines, upgraded to Caa1 from Caa2, LGD5, 74%.

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