Bangkok--14 Dec--Standard & Poor's
Standard & Poor's Ratings Services today said that its 'CCC+' issue-level and '6' recovery ratings on Affinia Group Inc.'s recent offering of notes remain unchanged after the amount was raised to $100 million from $75 million. The notes are an addition to Affinia's $267 million, 9% senior subordinated notes outstanding that are due 2014 (originally issued on Nov. 30, 2004).
On Dec. 6, 2010, we assigned the debt a rating of 'CCC+' and a recovery rating of '6', reflecting our expectation that lenders would receive negligible (0% to 10%) recovery of principal in the event of a default. The add-on notes have the same terms as, and will be treated as a single series with, the 9% senior subordinated notes. The add-on notes are guaranteed on an unsecured senior subordinated basis by the parent company and certain current and future wholly owned domestic subsidiaries.
Net proceeds from the notes issuance will be used to repay $49 million in existing indebtedness under a $315 million unrated asset-based loan revolving credit facility and to finance the $24 million acquisition of the company's remaining 50% interest of its India joint venture.
The ratings on Affinia Group Inc. reflect the company's highly leveraged financial risk profile and participation in the competitive auto aftermarket components industry, which contributes to what we consider a weak business risk profile. These factors more than offset Affinia's fair geographic diversity and improving profitability resulting from a multiyear restructuring program, which is now largely complete and has resulted in improved profit margins.
For the complete recovery analysis, please see Standard & Poor's recovery report on Affinia Group Inc., published Dec. 6, 2010, on RatingsDirect.
RATINGS LIST
Affinia Group Inc.
Corporate Credit Rating B/Stable/--
Ratings Unchanged
Affinia Group Inc.
$367 mil. 9% sr. sub. notes due 2014 CCC+
Recovery Rating 6
Complete ratings information is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com and RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Jeff Sexton, New York (1) 212-438-3448,
[email protected]
Analyst Contacts:
Nancy C Messer, CFA, New York (1) 212-438-7672
Robert Schulz, CFA, New York (1) 212-438-7808