Moody's rates Delphi DIP facility B1

Moody's Investors Service said it assigned a B1 rating to Delphi Corp.'s $2 billion of debtor-in-possession financing, which includes a $1.75 billion secured revolving credit facility and a $250 million secured term loan.

The ratings reflect solid collateral coverage of the commitments under a structured borrowing base arrangement, the significant percentage of collateral coming from more liquid working capital assets, the superpriority of liens provided under bankruptcy court approval and the potential value of pledged assets which supplement the borrowing base, Moody's said.

However, the agency said the ratings also reflect the current negative free cash flow of the borrower/guarantor group, ongoing concentration of business risk with General Motors, the current challenging automotive environment for GM and the inherent uncertainties of the outcome to Delphi's bankruptcy case.

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