Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S AFFIRMS ARVINMERITOR CORPORATE FAMILY RATING AT Ba2; ASSIGNS Ba1 RATING TO NEW BANK FACILITY; DOWNGRADES RATINGS ON CERTAIN UNSECURED NOTES TO Ba3; OUTLOOK NEGATIVE

07 Jun 2006
MOODY'S AFFIRMS ARVINMERITOR CORPORATE FAMILY RATING AT Ba2; ASSIGNS Ba1 RATING TO NEW BANK FACILITY; DOWNGRADES RATINGS ON CERTAIN UNSECURED NOTES TO Ba3; OUTLOOK NEGATIVE

Approximately $1.8 billion of rated obligations

New York, June 07, 2006 -- Moody's Investors Service has affirmed ArvinMeritor, Inc.'s ("ArvinMeritor") Corporate Family rating at Ba2 and assigned Ba1 ratings to the company's $1.05 billion of new first lien bank debt. Moody's lowered to Ba3 the ratings on the company's existing senior unsecured notes issued under the company's "1998 Indenture". The actions follow ArvinMeritor plans to reset the terms of its bank revolving credit facility and arranging a new $200 million bank term loan, both of which will benefit from first priority liens against certain of the company's assets. The rating outlook is Negative. Ratings on the company's remaining notes issued under the "1990 Indenture" (approximately $11 million) are under review with direction uncertain as that indenture contains stronger protective features than the 1998 indenture, and their treatment under the refinancing remains to be clarified. Moody's also affirmed ArvinMeritor's Speculative Grade Liquidity rating at SGL-2, representing good liquidity over the next 12 months.

Ratings affirmed:

ArvinMeritor, Inc.

Corporate Family, Ba2

Speculative Grade Liquidity, SGL-2

Ratings assigned:

ArvinMeritor, Inc.

$850 million first lien revolving credit, Ba1

$200 million first lien term loan, Ba1

Ratings downgraded:

ArvinMeritor, Inc.

6.75% notes maturing in 2008, to Ba3 from Ba2

6.8% notes maturing in 2009, to Ba3 from Ba2

8.75% notes maturing in 2012, to Ba3 from Ba2

8.125% notes maturing in 2015, to Ba3 from Ba2

Shelf filing for unsecured notes, to (P)Ba3 from (P)Ba2

Arvin Capital

Backed preferred stock, to B1 from Ba3

Ratings under review with direction uncertain:

ArvinMeritor, Inc.

6.625% notes maturing in 2007 (approximately $5 million remaining)

7.125% notes maturing in 2009 (approximately $6 million remaining)

ArvinMeritor will grant bank lenders under the new facilities a first lien against certain domestic assets, including accounts receivable, inventory, certain property, plant & equipment as well as shareholdings in foreign subsidiaries (generally limited to 65%), the shares of its special purpose vehicle used to facilitate accounts receivable securitization, and inter-company notes due from foreign subsidiaries. The pledged collateral will be designed and documented to not trigger the negative pledge provisions of the company's 1998 and 2006 indentures. Those indentures would mandate equal and ratable security be given to note holders if Secured Debt exceedes a prescribed limit. Subject to the terms of those indentures, a lien basket of 15% of defined Consolidated Net Tangible Assets was established but excluded certain assets and types of debt from the applicable definitions. A "savings clause" will be included in the bank security agreements which will have the effect of turning over to the trustee for the respective issues any amounts realized by the banks in excess of the applicable lien basket. Debt issued under the company's 1990 indenture involved a smaller lien basket and different terms which could be triggered by the proposed refinancing. Approximately $11 million of notes issued under that indenture remain (the 6.25% and 7.125% notes) following the company's debt tender in March. The company has not yet specified how these notes will be treated with respect to the terms of the indenture.

The company will use $190 mm of the proceeds from the new term loan to reduce usage under its accounts receivable securitization program, which was roughly $206 million at the end of March 2006. The new revolving credit for $850 million will replace an existing $900 million facility. The transaction will not materially increase the company's indebtedness, but will further extend its debt maturity profile. The refinancing will not affect prospects for the company's operations or cash flows. Changes to the company's financial covenants will provide incremental headroom for financial covenant compliance. Covenants are not expected to constrain effective availability under the revolving credit facility over the next 12 months. In turn, this enhances the company's financial flexibility. Consequently, the Corporate Family rating of Ba2 has been affirmed.

The negative outlook (related to ratings not incorporated in the review) represents continuing concerns enumerated in Moody's rating action of April 4, 2006. Principally these reflect uncertainty associated with the impact to the company's performance in 2007 when new emission regulations for commercial vehicles in North America come into effect. These could adversely affect results in ArvinMeritor's Commercial Vehicle System's segment ("CVS"), which has accounted for the vast majority of recent operating earnings while its Light Vehicle System's ("LVS") segment has struggled with poor returns. However, CVS's trailer, aftermarket, emission and international operations may mitigate some of the anticipated decline in new commercial vehicle production in North America. In addition, restructuring actions in both segments are expected to generate savings. While visibility on the extent of any potential decline in the CVS business remains limited, margins within LVS must show improvement to support the current ratings. In the absence of a material improvement in those margins, LVS results may not fully offset any potential decline in CVS. The negative outlook also considers the potential for labor disruptions should negotiations between Delphi Corporation, GM and the UAW and between Tower Automotive, Ford and the UAW fail to resolve current issues related to labor costs.

The remaining notes issued under the 1990 indenture could be up-graded should they receive equal and ratable treatment with the secured bank debt or receive other treatment that preserves or enhances their position. Conversely, should they for any reason not be granted equal and ratable treatment their ratings could be lowered.

The Ba1 rating on the new bank facilities reflects higher recovery expectations based on their priority of claims. However, the new bank facilities are not structured on a borrowing base nor supported by appraisals on the pledged assets. The negative pledge clause in the 1998 and 2006 indenture also somewhat limits the extent of liens which can be granted against foreign subsidiary shareholdings and inter-company notes. Moody's concluded the senior secured ratings could be up-notched one level from Corporate Family. Higher recovery expectations on the secured debt, however, adversely affects recovery expectations for unsecured obligations. Ratings on unsecured instruments (other than those issued under the 1990 indenture) have been lowered one notch from Corporate Family. Rating on Arvin Capital's backed preferred shares have also been lowered one notch.

The Speculative Grade Liquidity rating of SGL-2 has been affirmed and represents good liquidity over the next 12 months. While the amount of the company's effective availability to its external commitments has increased as a result of the financing, prospects for free cash flow and other internal resources have not changed sufficiently to support a higher overall rating at this time. However, the rating is better positioned within the SGL-2 category. The granting of security interests, related terms, and continuing impact of the negative pledge clause under the indentures, somewhat diminishes the capacity to develop incremental sources of alternative funding.

ArvinMeritor, Inc., headquartered in Troy, MI, is a global supplier of a broad range of integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. Revenues in fiscal 2005 were approximately $8.9 billion.

New York
Michael J. Mulvaney
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Edwin Wiest
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com