American Axle and Manufacturing Inc.
) has announced that its wholly-owned subsidiary, American Axle
& Manufacturing, Inc. ("AAM"), is planning a public offering of
senior notes. The company subsequently declared the pricing of $550
million of 6.625% senior notes due in 2022 at an issue price of
100% in public offering subject to customary closing
The proceeds from this offering will be utilized in the purchase
of all of the company's 5.25% senior notes due in 2014, including
the payment of accrued interest and any related early tender
premium. The remaining amount will be utilized in partial
redemption of its 5.25% senior notes due in 2014, payment of
pension obligations and in other general corporate purposes.
Standard & Poor's Ratings Services has assigned a 'B' rating
to the proposed $550 million senior notes offering. It has also
conferred a recovery rating of '6' rating as it expects that
lenders would receive around 0% to 10% recovery of the principal
amount in case of a default. However, the rating service has
downgraded the issue-level rating on the company's $425 million
9.25% senior secured notes due in 2017 to 'BB' from 'BB+' and
revised the recovery rating to '2' from '1'.
Fitch Ratings has reaffirmed the 'B+' rating to Issuer Default
Ratings (IDRs) of American Axle and AAM. It has also allocated
'B-/RR6' rating to American Axle's proposed $550 million senior
notes offering. The rating service has affirmed 'BB+/RR1' ratings
on AAM's $438 million secured revolving credit facility and $383
million of senior secured notes and 'B-/RR6' ratings on $1.3
billion senior unsecured notes.
American Axle is a leading supplier of driveline systems,
modules and components for the light vehicle market. The company
makes axles, driveshafts and chassis components for light trucks,
sport utility vehicles and passenger cars. It supplies driveline
systems and other components to
General Motors Company
Ford Motor Co.
), Volvo and various other OEMs.
American Axle retains a Zacks #3 Rank on its shares, which
translates into a short term (1-3 months) Hold rating. We have a
long term (more than 6 months) Neutral recommendation on the
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