OREANDA-NEWS. Fitch Ratings expects to rate Ryder System, Inc.'s (Ryder) five-year and nine-month, $300 million senior unsecured notes 'A-'. A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

IDRS AND SENIOR DEBT
The expected rating reflects Fitch's expectation that there will not be a material impact to Ryder's leverage resulting from this issuance. Proceeds from the issuance are expected to be used for general corporate purposes, including the repayment of the firm's outstanding debt. Furthermore, the expected rating of the issuance is equalized with those of Ryder's existing senior unsecured debt, as the notes will rank equally in the capital structure. The ratings of the senior unsecured notes are equalized with the long-term Issuer Default Rating (IDR), reflecting Ryder's 100% unsecured funding profile.

Ryder's ratings were last affirmed by Fitch following the completion of its fleet leasing peer review in October 2015. The ratings reflect Ryder's established market position in the truck leasing business, growing market share in the logistics and supply chain solutions (SCS) business, relatively consistent operating performance through market cycles, adequate leverage, strong liquidity, and an unsecured funding profile.

The Stable Outlook reflects Fitch's expectation for continued economic access to the capital markets through various market cycles, limited sensitivity to rising interest rates, strong liquidity, stable leverage, and earnings growth over the Outlook horizon driven by an increase in full service lease (FSL)/contract revenue and growth in the logistics business.

RATING SENSITIVITIES

IDRS AND SENIOR DEBT
Fitch believes a positive rating action is limited in the medium term; however, positive rating momentum could develop over time from greater revenue diversification, stronger liquidity and lower leverage.

Conversely, negative rating actions could be driven by an increase in leverage resulting from a decline in earnings and/or free cash flow beyond Fitch's expectations, or a substantial pension charge, which inflates leverage meaningfully beyond the targeted range for an extended period. Additionally, deterioration in Ryder's competitive positioning, weakening asset quality, an inability to realize residual values on used vehicles, a material increase in non-earning vehicles, and/or a decline in liquidity could result in negative rating actions.

The ratings of the senior unsecured debt are sensitive to changes in Ryder's IDR and the level of unencumbered balance sheet assets in a stressed scenario, relative to outstanding debt. A material shift to secured funding and/or a reduction in the level of unencumbered assets could affect the notching between the long-term IDR and the unsecured rating.

Established in 1933 and headquartered in Miami, FL, Ryder is one of the world's largest providers of highway transportation services. Ryder's stock is listed on the NYSE under the ticker 'R'.

Fitch has assigned the following expected rating:

Ryder System, Inc.
--Senior unsecured notes 'A-(EXP)'.

Fitch currently rates Ryder as follows:

Ryder System, Inc.
--Long-term IDR 'A-';
--Short-term IDR 'F2';
--Commercial paper 'F2';
--Senior unsecured notes 'A-'.

The Rating Outlook is Stable.