Echo Global Logistics retains its debt rating at B3 from Moody’s, expecting steady performance. S&P Global has also kept the company at a B- rating for two years after a downgrade. Moody’s affirms Echo’s probability of default at B3-PD and senior secured bank credit facilities at B2, with a stable outlook.

Despite soft economic conditions, Echo has shown modest freight volume growth. Moody’s expects the company to maintain steady earnings and liquidity in the challenging freight market. EBITDA margins typically range from 3%-5%, reflecting a mix toward less profitable contracted volumes. Echo’s debt/EBITDA margin is forecasted to be slightly below 7X by year-end.

Echo Global’s economics feature low profit margins, high leverage, and expectations for modest free cash flow. Moody’s sees Echo maintaining adequate liquidity through cost-saving actions. The company’s highly variable cost structure allows flexibility during downturns. Relationships with shippers and transportation carriers have helped Echo increase transportation volumes despite market softness.

Recent ratings actions on 3PLs have been mixed during the freight recession. C.H. Robinson’s rating was upgraded to BBB+ by S&P Global, while Odyssey Logistics was downgraded by Moody’s. Echo Global’s high leverage leaves limited cushion for potential earnings decline. Moody’s report overall remains positive about Echo’s scale, relationships, diversity, and technology capabilities.

Read more at Yahoo Finance: Echo Global keeps Moody’s B3 rating in tough market