Fitch Ratings Assigns 'BBB-' To ArvinMeritor Inc.Business Editors CHICAGO--(BUSINESS WIRE)--Feb. 21, 2002 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. assigns 'BBB-' to ArvinMeritor Inc.'s (ARM) 10-year notes due 2012. The proceeds of the issuance are expected to be used for repayment of bank debt. The rating assignment reflects ARM's solid market position with leading product lines, geographic presence, diversified end-markets and products, and executed/realized merger integration and restructuring plans. These factors have enabled ARM to maintain a moderate level of operating profitability through ongoing cyclical softness in much of ARM's end the end of the arm; a good distance off. See under Arm. See also: Arm Arms markets, allowing for positive cash flow and debt reduction. Much of the debt reduction, however, was derived from significant working capital reduction. ARM's financial policy to reduce dividends by 55% and rescind To declare a contract void—of no legal force or binding effect—from its inception and thereby restore the parties to the positions they would have occupied had no contract ever been made. rescind v. the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program during FY2001 has also aided debt holder protection. While the continuing softness in ARM's end markets and pressures from OEMs for price concessions constrain the margin outlook, ARM's restructuring and integration efforts are anticipated to be an offset, allowing ARM to be marginally cash flow positive again through FY2002. Net operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. will be one of the key metrics Fitch will monitor going through ARM's current market environment. The Rating Outlook is Stable. ArvinMeritor, Inc., headquartered in Troy, Michigan Troy is a city in Oakland County of the U.S. state of Michigan. It is a suburb of Detroit. As of the 2000 census, the city had a total population of 80,959, the 12th largest city in Michigan by population. , is a global supplier of various integrated systems, modules and components in the areas of exhaust systems, axles, brakes, suspension and ride control, door and roof systems and filters, serving both the original equipment (OE) and replacement aftermarkets. ARM was formed in July 2000 through the merger of Arvin Industries, Inc. and Meritor Automotive, Inc. |
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