Moody’s cuts Brunswick Rail, notes to Ca

Moody's Investors Service said it downgraded Brunswick Rail Ltd.’s (BRL) corporate family and probability of default ratings to Ca from Caa3 and to Ca-PD from Caa3-PD, respectively.

Consequently, the agency downgraded the senior unsecured rating of the $600 million 2017 notes issued by Brunswick Rail Finance Ltd. and guaranteed by BRL to Ca from Caa3.

The outlook is negative.

"We downgraded BRL's ratings because its ability to generate cash in the coming 12 to 18 months will likely deteriorate further as market weakness persists and railcar lease rates drop. BRI's confirmation that it is considering debt restructuring, an action we consider a default, also factors into today's downgrade," Moody's vice president and senior analyst Julia Pribytkova said in a news release.

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