Fitch Rates TRW Automotive Inc.'s New Sr Sec Bank Lines '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 TRW Automotive Inc.'s new senior secured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, new senior secured term loan A facility and new senior secured term loan B facility. The new bank lines replace the existing senior secured bank lines and as such, do not affect the current ratings or Rating Outlook. In addition, Fitch is withdrawing its issue ratings on the 9-3/8% senior notes due 2013 ('BB-'), the 10-1/8% senior Euro notes due 2013 ('BB-'), the 11% senior subordinated notes due 2013 ('B+') and the 11-3/4% senior subordinated Euro notes due 2013 ('B+') following the tender of substantially all of the notes. The current ratings of TRW Automotive Holdings TRW Automotive Holdings NYSE: TRW is a supplier of automotive parts to manufacturers and aftermarket dealers. [1]. It was created out of a sell-off of parts of the former TRW corporation. Corp. (TRW TRW The Real World (TV reality show) TRW The Right Way TRW Tactical Reconnaissance Wing TRW The Retriever Weekly (University of Maryland, Baltimore, MD) TRW Thompson Ramo Wooldridge Inc ) and TRW Automotive, Inc. are listed as follows: TRW Automotive Holdings Corp. --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'; TRW Automotive Inc. --Issuer Default Rating (IDR) 'BB'; --Senior secured revolving credit facility 'BB+'; --Senior secured term loan A facility 'BB+'; --Senior secured term loan B facility 'BB+'; --Senior unsecured notes 'BB-'. Fitch's rating actions affect approximately $4 billion in total debt, including the undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely revolving credit facility. The Rating Outlook is Stable. TRW announced that it is refinancing $2.5 billion in existing bank facilities with the same amount in new facilities. The new credit facilities include a $1.4 billion revolving credit facility, a $600 million tranche A-1 term loan and a $500 million tranche B-1 term loan. The new bank lines closed on May 9, 2007. The new credit agreement lowers TRW's cost of capital, extends maturities and loosens covenants. Interest rates for the revolver and tranche A-1 term loan are based on LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus an amount determined by pricing grid based on a Net Leverage Ratio while the tranche B-1 term loan interest rate is based on LIBOR plus 1.5% or an alternative base rate plus 0.5%. TRW's existing revolver and tranche A term loan matures in January of 2010, the tranche B and B-2 term loans mature in June 2012 and a tranche E term loan that matures in October of 2010. Under the new credit agreement, the revolver matures five years from the closing date, the tranche A-1 term loan matures six years after closing and the tranche B-1 matures six years and nine months from the closing date. Financial covenants are slightly less restrictive and include a minimum interest coverage ratio and a maximum net leverage ratio. The net leverage ratio takes unrestricted cash in excess of $100 million and up to $500 million and nets it against debt to determine the ratio. The current facility uses gross debt in the calculation. Fitch's ratings reflect TRW's relatively diverse customer base, global manufacturing presence, as well as the company's technology-driven products. Operating efficiency, a substantial book of business outside of North America and continued healthy demand for safety related products partially offsets significant declines in North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. manufacturers' volumes as well as industry cost challenges. The company's margins remain at the high end of the automotive supply chain. Healthy margins and liquidity should provide TRW with a buffer if industry fundamentals were to erode materially. Even when assuming adverse economic and industry conditions through 2007, Fitch expects TRW to generate free cash flow, although debt reduction could be limited in such a scenario. Fitch's concerns include debt levels, margin pressures from price competition and raw materials, customers' production volumes, potential work stoppages due to customers' critical union negotiations, and a financially stressed base of suppliers other than TRW. Including the cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has balance of $589 million, total liquidity at the end of the fourth-quarter 2006 (4Q06) was approximately $1.7 billion. Also at the end of 4Q06, TRW had approximately $830 million of availability under its current revolver after $70 million in outstanding letters of credit (LOCs). As of Dec. 31, 2006, there were no outstanding balances on any of TRW's accounts receivable (A/R) programs. Under the U.S. A/R securitization facility, approximately $191 million of receivables was eligible for borrowings and about $104 million would have been available for funding. After giving effect to a January 2007 amendment to the A/R facility, $196 million would have been available for funding. In addition, approximately EUR EUR In currencies, this is the abbreviation for the Euro. 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. 140 million and GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 11 million were available under uncommitted European facilities. 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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