Elevate your local knowledge

Sign up for the iNFOnews newsletter today!

Select Region

Selecting your primary region ensures you get the stories that matter to you first.

Credit ratings agency says 2 railroads might be downgraded if proposed merger goes forward

OMAHA, Neb. – Rating agency Moody’s says Canadian Pacific and Norfolk Southern could face credit downgrades if the two railroads move forward with a proposed merger.

Moody’s said Monday that it hasn’t taking any action on the railroads’ ratings yet because it’s not clear Norfolk Southern will agree to Canadian Pacific’s buyout offer.

But as the probability of a merger increases, Moody’s says a negative rating action is likely.

That’s because Canadian Pacific (TSX:CP) would have to borrow significantly more to finance the roughly $27-billion deal, and past railroad mergers have had integration problems.

So far Norfolk Southern has rejected Canadian Pacific’s offers to buy the railroad, but it hasn’t responded to CP’s latest bid.

News from © The Associated Press, . All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.

Join the Conversation!

Want to share your thoughts, add context, or connect with others in your community?

Create a free account

The Associated Press

The Associated Press is an independent global news organization dedicated to factual reporting. Founded in 1846, AP today remains the most trusted source of fast, accurate, unbiased news in all formats and the essential provider of the technology and services vital to the news business. More than half the world’s population sees AP journalism every day.

Related Articles