S&P cuts Gestamp Automocion

S&P said it lowered its issuer rating for Gestamp Automocion to BB- from BB and issue ratings to BB from BB+. The agency also removed the ratings from CreditWatch with negative implications, where they had been placed on April 21.

“With about 80% of its sales stemming from Europe and North America (based on 2019 revenue), we forecast that Spain-based auto parts manufacturer Gestamp's revenue will decline by 20%-22% in 2020. We acknowledge that Gestamp is taking measures to adjust its cost base to lower revenue, but we anticipate that the company's S&P Global Ratings-adjusted EBITDA margin will drop to 7.5%-8.5% in 2020 from 11% in the previous year,” S&P said in a press release.

The outlook is stable.

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