S&P rates CSX notes BBB+

S&P said it assigned a BBB+ rating to CSX Corp.'s proposed senior unsecured notes due 2026, 2046 and 2066.

The proceeds will be used from these notes to fully redeem, upon completion of the offering, the company's outstanding 5.6% notes due May 1, 2017, 6.25% notes due March 15, 2018 and 7.375% notes due Feb. 1, 2019 and for general corporate purposes, the agency said.

The general corporate purposes may include repurchases of CSX's common stock, capital investment, pension contributions, working capital requirements, improvements in productivity and other cost reductions at CSX's major transportation units, S&P said.

The rating reflects the U.S. freight railroad industry's favorable risk characteristics and the company's large and strategically important rail network and solid cash flow generation, the agency said.

These strengths are offset by price competition from other railroads and trucking companies, S&P said, and the company's high capital spending requirements.

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