Research Update: Stonepeak Taurus Lower Holdings LLC Outlook Revised To Negative On Weaker Credit Metrics; 'B' Rating Affirmed

Stonepeak Taurus Lower Holdings LLC's (operating as TRAC Intermodal) financial performance through third-quarter 2024 was negatively affected by lower pool fleet utilization, despite growth in import volumes due to shorter rental periods as supply chain disruptions eased. We expect similar conditions to persist through 2025, given our belief fleet utilization will likely remain close to current levels, while policy uncertainties around tariffs could negatively affect chassis demand. Therefore, we revised our outlook on TRAC to negative from stable and affirmed our 'B' long-term issuer credit rating and 'B+' issue rating on its senior secured debt. The negative outlook reflects that we could lower our ratings on TRAC if we expect the company's EBIT interest coverage to remain below 1.1x or

...- Stonepeak Taurus Lower Holdings LLC's (operating as TRAC Intermodal) financial performance through third-quarter 2024 was negatively affected by lower pool fleet utilization, despite growth in import volumes due to shorter rental periods as supply chain disruptions eased. - We expect similar conditions to persist through 2025, given our belief fleet utilization will likely remain close to current levels, while policy uncertainties around tariffs could negatively affect chassis demand. - Therefore, we revised our outlook on TRAC to negative from stable and affirmed our 'B' long-term issuer credit rating and 'B+' issue rating on its senior secured debt. - The negative outlook reflects that we could lower our ratings on TRAC if we expect the company's EBIT interest coverage to remain below 1.1x or its funds from operations (FFO) to debt to remain below 12% on a sustained basis....

Research Update