TRANSPORT group Stagecoach will find it easier to obtain funds after it earned an upgrade from one of the world's biggest credit rating agencies.

Moody's said it was raising the company's senior unsecured credit rating to investment grade - a move that should lower the cost of borrowings and make it easier for the bus and rail group to obtain funds.

Stagecoach has been selling parts of its US operation to reduce debts.

A spokesman said the upgrade reflected its stronger finances and flexibility following the restructuring.

"This is another sign that Stagecoach is moving in the right direction," he said.

Since last year, Stagecoach has been offloading parts of its Coach USA business and its Hong Kong operations in a bid to cut debt and focus increasingly on its UK bus and rail activities.

The company has been trying to get out of businesses particularly exposed to economic fluctuations and the cyclical nature of the leisure industry, such as tour and charter bus services, in favour of regular scheduled services.

Stagecoach is using the proceeds, about £180m in the US, to reduce group debts, which fell to about £560m in August from more than £700m in late April.