CN posts 'For Sale' sign - Canadian National Railways

Railway Age, June, 1995 by Greg Gormick

* Debt rating in question. As well, on May 8, Moody's Investors Service, Inc., said it would review CN's long-term debt rating for possible downgrading. Standard & Poor's Canada has already put CN's unsecured debt on credit watch; it is currently rated as AA. Many analysts have said that CN will only be on the outer edge of acceptable capitalization ratios of U.S. Class I roads if it can lower its debt ratio to 45% from the 1994 level of 47.9%.

"We believe CN has to go out on to the market with the potential of achieving a triple-B debt rating to be viable," says Young. "I think people recognize what that will require. We have to pay down part of that $2.5 billion in debt."