Research Update: Forward Air Corp. Assigned 'BB-' Issuer Credit Rating; Outlook Stable; Term Loan Rated 'BB-'

Forward Air Corp. entered into a definitive agreement in August 2023 to acquire Omni Logistics LLC using a mixture of cash, debt, common equity, and preferred equity. The proposed debt financing will consist of a $400 million revolving credit facility (unrated) due 2028, and total debt commitments of $1.85 billion, including a $925 million first-lien term loan due 2030. We include the proposed $1.168 billion of preferred equity in our adjusted debt calculation. S&P Global Ratings assigned its 'BB-' issuer credit rating to Forward Air, a provider of freight services in North America. We also assigned our 'BB-' issue rating and '3' recovery rating to the proposed first-lien term loan. This indicates our expectations of meaningful recovery (50%-70%; rounded estimate:

...- Forward Air Corp. entered into a definitive agreement in August 2023 to acquire Omni Logistics LLC using a mixture of cash, debt, common equity, and preferred equity. - The proposed debt financing will consist of a $400 million revolving credit facility (unrated) due 2028, and total debt commitments of $1.85 billion, including a $925 million first-lien term loan due 2030. We include the proposed $1.168 billion of preferred equity in our adjusted debt calculation. - S&P Global Ratings assigned its '##-' issuer credit rating to Forward Air, a provider of freight services in North America. We also assigned our '##-' issue rating and '3' recovery rating to the proposed first-lien term loan. This indicates our expectations of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default. - The stable outlook reflects our expectation that credit metrics will improve following the acquisition if the preferred shares are converted to common equity following a shareholder...

Research Update