Moody's assigns TRAC B2, loan Caa1

Moody's Investors Service said it assigned ratings to Stonepeak Taurus Lower Holdings LLC (TRAC Intermodal), including a B2 corporate family rating and a B2-PD probability of default rating. Stonepeak Taurus Lower is the parent entity of TRAC Intermodal Holdings Corp.; these two entities are co-borrowers. Moody's also assigned a Caa1 rating to TRAC Intermodal's senior secured second-lien term loan.

“TRAC Intermodal's B2 corporate family rating is constrained by execution risk associated with the company's re-entry into the domestic chassis business, the containers for which are designed for travel by railroad. The expiration of a non-compete agreement in early 2021 enabled TRAC Intermodal to begin rebuilding its domestic chassis business, which it had previously sold. Reestablishing the domestic chassis business will require a significant amount of management attention and financial resources. The rating is also limited by the company's lack of business diversity and its moderate scale,” Moody’s said in a press release.

The loan proceeds will be used to fund a $342 million cash dividend to the company's owners and pay fees and expenses related to this transaction.

The outlook is stable.

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