Moody's ups Allison Transmission

Moody's Investors Service said it upgraded the ratings of Allison Transmission, Inc., including the corporate family rating to Ba1 from Ba2, the senior unsecured rating to Ba2 from Ba3 and the senior secured bank credit facility to Baa2 from Baa3.

“The upgrade reflects Moody's expectation that Allison will maintain its strong competitive position in the global market for automatic transmissions used in medium and heavy trucks and commercial vehicles (CV). The upgrade also recognizes Moody's expectation that the company's financial strategy will result in debt/EBITDA maintained near 3.5x and that the company's liquidity profile will remain strong,” Moody’s said in a press release.

“Despite a 23% revenue decline during covid-impacted 2020, Allison generated a 28% EBITA margin, 13% EBITA/average assets and over $350 million in free cash flow–operating metrics that are very robust for the Ba1 rating level,” the agency noted.

The outlook is stable.

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