Fitch Rates ArvinMeritor's $175MM Sr Unsec'd Convertible Debt 'BB-'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned a 'BB-' rating to ArvinMeritor's (ARM) issuance of $175 million (with a potential upsizing to $200 million) in convertible senior unsecured notes. The issue has a 4% coupon and matures in 2027. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). are expected to be used to repay in full the $169.5 million aggregate principal amount of ARM's outstanding Term Loan B due 2012. As of Dec. 31, total debt outstanding was $1.3 billion. ARM's Rating Outlook is Negative. Fitch's current ratings on ArvinMeritor are as follows: --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) 'BB'; --Senior unsecured 'BB-'; --Trust preferred 'B'. ARM is reconfiguring its capital structure after having announced the pending sale of its Emissions Technologies (ET) business. With the payoff of the Term Loan B, the total senior secured bank facility will consist of the $980 million revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to on which there was no outstanding balance as of Dec. 31. After closing the sale of ET, proceeds should enable total debt to be reduced from $1.3 billion at the end of ARM's fiscal first quarter to about $1 billion. The Negative Outlook stems from Fitch's concerns regarding the industry environment during 2007. The reduced debt level comes as ARM's markets go through instability resulting from lower customer production volumes in its light-vehicle businesses and weak heavy-truck demand caused by the introduction of new diesel emissions regulations. While Fitch recognizes that the reduced debt burden provides ARM with greater financial flexibility to weather the difficult industry environment, the Outlook reflects a heightened risk of operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. that could potentially result in a re-leveraging of ARM's balance sheet. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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