S&P Global has cut Odyssey Logistics' debt rating to equivalent of Moody's Caa1, a move that brings it in line with its chief competitor. The agency also raised the possibility of an Odyssey default in 2027.
The downgrade is a result of ongoing earnings weakness and debt burden, which S&P Global believes will impair Odyssey's ability to refinance upcoming debt maturities.
Odyssey faces maturity in a $125 million revolving credit facility in July 2027, though it has only drawn $9 million on that so far. The company also has a term loan of $490 million that matures in October 2027.
The negative outlook raised by S&P Global suggests conditions are in place for a further downgrade barring a turnaround. This poses a risk to the sustainability of Odyssey's capital structure and heightens the possibility of a debt restructuring.
S&P Global's report highlights the challenges faced by logistics companies with high levels of debt, particularly those with limited access to capital markets.
The agency believes that ongoing earnings weakness will continue in 2026 and 2027, which will further impair Odyssey's ability to refinance its debt. This trend is expected to persist due to soft freight demand, depressed trucking rates, and rising costs.
Odyssey's unique position as a publicly-traded company with high levels of debt sets it apart from its competitors. The agency's move underscores the need for logistics companies to address their debt burden and improve their financial stability.
The implications of S&P Global's downgrade will be closely watched by investors and analysts, who will be keen to see how Odyssey responds to this challenge.
The move by S&P Global highlights the challenges faced by the logistics sector, particularly those with high levels of debt.
