Moody’s raises debt ratings for American Axle, says outlook is positive
By APMonday, March 1, 2010
Moody’s raises debt ratings on American Axle
NEW YORK — Moody’s Investors Service on Monday raised its corporate debt rating for American Axle & Manufacturing Holdings Inc., which makes drive train and chassis systems, by one notch, to Caa1.
Moody’s also said the outlook for American Axle is positive and raised the company’s senior secured note one notch to B1; Moody’s raised the company’s unsecured guaranteed notes and convertible notes one notch to Caa2.
Detroit-based American Axle reported a fourth-quarter profit and said it expects to make money this year, with sales growing 25 percent to 40 percent.
Moody’s said the higher debt ratings reflect the company’s better chances of paying down debt. Restructuring moves in 2009 helped its fourth quarter and set American Axle up for better results if vehicle sales increase.
Moody’s said American Axle’s rating is limited by its “significant exposure” to sales of SUVs and light trucks, and its reliance on its largest customers, General Motors and Chrysler, which accounted for 86 percent of its 2009 sales.
American Axle shares rose 23 cents, or 2.3 percent,t o $10.04 in afternoon trading.
