Fitch: Allison Transmission notes BB/RR4

Fitch Ratings said it assigned a rating of BB/RR4 to Allison Transmission, Inc.'s proposed issuance of $500 million in senior unsecured notes due 2027.

Allison Transmission is the principal operating subsidiary of Allison Transmission Holdings, Inc. (ALSN).

In addition, the agency does not expect the planned repricing of Allison Transmission’s secured term B-3 loan or the planned upsizing of its secured revolving credit facility to affect the ratings of ALSN, Allison Transmission or the loan.

Fitch currently rates the secured term B-3 loan and the secured revolver BB+/RR1.

The long-term issuer default ratings are BB and the outlooks are stable.

Allison Transmission intends to use a portion of the net proceeds from its proposed notes to repay $200 million in borrowings under the term B-3 loan. The remainder of the proceeds will be used for general corporate purposes.

Fitch said the ratings of ALSN and Allison Transmission are supported by the company's high margins and strong free cash flow, set against a backdrop of elevated leverage. ALSN continues to lead the global market for fully automatic transmissions for commercial vehicles, off-road machinery and military equipment, the agency explained.

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