Feb 20 - Fitch Ratings expects to rate Ryder System's Inc.'s
(Ryder) six-year, $250 million senior unsecured notes 'A-'. Fitch does not
believe there will be a material impact on Ryder's leverage as a result of the
issuance, as proceeds are expected to be used to refinance debt maturities,
repay commercial paper outstanding and for general corporate purposes. A full
list of rating actions is at the end of this rating action commentary.
RATING ACTION RATIONALE
Ryder currently has a Stable Rating Outlook, which reflects Fitch's expectation
for continued economical access to the capital markets through market cycles,
strong liquidity, solid capitalization and earnings growth in 2013 driven by an
increase in full service lease activity and organic growth in supply chain
RATING DRIVERS AND SENSITIVITIES
While Fitch believes positive rating actions are likely limited to the current
rating category, positive rating momentum could result from greater revenue
diversification, operating performance that is consistent with Fitch's
expectations and broader industry performance, and the maintenance of solid
liquidity and capitalization ratios.
Negative rating action could be driven by a decline in earnings and/or free cash
flow beyond Fitch's expectations, deterioration in asset quality, an inability
to realize residual values on used vehicles, a material increase in non-earning
vehicles, a decline in liquidity, or an extended increase in leverage beyond the
Established in 1933 and headquartered in Miami, Florida, Ryder is one of the
world's largest providers of highway transportation services. As of Dec. 31,
2012 the company had 172,500 vehicles in its fleet and $6.3 billion of annual
revenues. Ryder's stock is listed on the NYSE under the ticker 'R'.
Fitch expects to assign the following rating:
Ryder System's Inc.:
--$250 million senior unsecured notes due 2018 'A-'.
Fitch currently rates Ryder System's Inc. as follows:
--Long-Term Issuer Default Rating 'A-';
--Short-Term Issuer Default Rating 'F2';
--Commercial Paper Rating 'F2'; and
--Senior unsecured notes 'A-'
The Rating Outlook is Stable.