Moody's rates Union Pacific pass-through certificates Aa2

Moody's Investors Service said it assigned an Aa2 rating to the $399 million series 2015-1 pass-through certificates that Union Pacific Railroad Co. plans to issue through the Union Pacific Railroad Co. 2015-1 Pass Through Trust, upgraded Missouri Pacific Railroad Co.’s series A and B senior general income debentures to A1 from A3 and senior income debentures to A2 from A3 and affirmed Union Pacific Corp.’s A3 senior debt rating, Union Pacific Railroad’s A2 senior debt rating and all other Union Pacific Railroad pass-through certificate ratings (Aa2/Aa3). The outlook is stable.

The issuer will use the proceeds from the sale of the certificates to purchase equipment trust certificates, which will be issued by Union Pacific Railroad to help finance the acquisition of new locomotives.

The upgrade of the Missouri Pacific Railroad mortgage bonds due 2020 and the mortgage bonds due 2030 to A1 from A3 reflect the security requirements of the bonds relative to the size of the debt, and the Missouri Pacific Railroad income debentures due 2045 were upgraded to A2 from A3 because the income required to pay interest is modest relative to Union Pacific Railroad's scale, the agency said.

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