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  Title	Moody's Ratings: FTAI Infrastructure's railroad acquisition is credit positive despite increased leverage
  ID	12260680
  External ID	7948922919
  Author	Unknown
  Published Date	Aug. 6, 2025, 5:14 p.m.
  Summary	New York, August 06, 2025 -- Moody's Ratings (Moody's) said that FTAI Infrastructure Inc.'s (FIP) proposed acquisition of The Wheeling Corporation (unrated), owner of the Wheeling & Lake Erie Railway
  Tags	None
  URL	https://ratings.moodys.com/ratings-news/448312
  Sentiment	Negative: 0.01026    Neutral: 0.09127    Positive: 0.89847
  Relevance	0.03766

• Content Details

  Content ID	7837800
  Key	dc82a128-6d0c-45ba-99e1-9a8064a8864e
  Content	New York, August 06, 2025 -- Moody's Ratings (Moody's) said that FTAI Infrastructure Inc.'s (FIP) proposed acquisition of The Wheeling Corporation (unrated), owner of the Wheeling & Lake Erie Railway Company (the "W&LE"), for cash consideration of $1.05 billion, has not currently impacted FIP's B3 Corporate Family Rating (CFR) or its negative outlook. The acquisition is credit positive because it will strengthen FIP's railroad business through greater scale, broader reach, and more diverse customers. However, it will also raise financial leverage, introduce additional structural complexity, and heighten short-term execution and integration risks. Through the integration of W&LE with its existing Transtar operations, FIP projects substantial cost efficiencies, synergies, and long-term growth opportunities. Management anticipates that the consolidated freight rail segment will achieve an estimated annual Adjusted EBITDA of $200 million by the end of 2026. FIP's debt and preferred obligations are expected to rise significantly based on the company's plan to issue $1.25 billion in new debt and $1 billion in preferred stock. The company plans to finance and close the W&LE acquisition simultaneously with the refinancing of FIP's outstanding $600 million corporate notes and approximately $440 million of Series A preferred equity. Consequently, FIP's total debt level will rise by about $650 million and preferred obligations by over $550 million following the contemplated transactions. Additionally, the new preferred equity will be issued by a newly established holding company that will own both the W&LE and Transtar railroad assets, resulting in structural subordination for FIP's lenders. To achieve long-term benefits from the acquisition, management needs to complete the planned transactions, integrate the new railroad assets, and execute its business plans as expected. The company plans to increase earnings, lower leverage, and improve free cash flow through 2026. These risks are incorporated into the negative ratings outlook. The transaction is expected to close pursuant to rules established by the U.S. Surface Transportation Board (STB) in the third quarter of 2025, subject to customary closing conditions. The Company expects to gain control of W&LE upon receipt of approval by the STB, at which time W&LE will become an affiliate of Transtar. FIP's B3 CFR reflects its very high financial leverage, which will increase from this acquisition; weak interest coverage; and inconsistent operating track record. The company has a complex capital structure, including significant non-recourse debt at various operating subsidiaries, and high-coupon preferred obligations that are growing rapidly because of suspended cash dividends (currently being paid in-kind). The planned refinancings will improve FIP's maturity profile and eliminate the existing high-coupon preferred obligations. This will enable larger cash distributions from the railroad operations to FIP to service its debt balance, improving its standalone financial leverage metrics despite the increased debt load. The credit profile is supported by FIP's strategically located and diversified assets providing critical logistics and infrastructure support, good revenue visibility backed by long-term contracts at Transtar, Jefferson, and Long Ridge, mostly high-quality and sticky customer base, and long lived assets that require low maintenance capital. FTAI Infrastructure Inc. is a publicly traded diversified infrastructure company with exposures to the energy, power and railroad transportation industries. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com for the most updated credit rating action information and rating history. Sajjad Alam VP - Senior Credit Officer Peter Speer Associate Managing Director Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2025 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED OR OTHERWISE MADE AVAILABLE BY MOODY’S (COLLECTIVELY, “MATERIALS”) MAY INCLUDE SUCH CURRENT OPINIONS. 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  Data Source Type	news
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