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Fitch rates American Axle notes BB-RR4
Fitch Ratings said it assigned a BB-/RR4 rating to American Axle & Manufacturing, Inc.'s (AAM) proposed issuance of $350 million in senior unsecured notes due 2026.
AAM is the principal operating subsidiary of American Axle & Manufacturing Holdings, Inc. (AXL).
The long-term issuer default ratings are BB- with a stable outlook.
The recovery rating of RR4 on AAM's senior unsecured notes reflects the agency’s expectations of average recovery prospects in the 31%-50% range in a distressed scenario.
AAM intends to use the proceeds, along with cash-on-hand, to redeem its $400 million in 6¼% senior unsecured notes due 2021.
Fitch said the ratings reflect the auto supplier's strong margins and the increased scale and diversity of its book of business following its acquisition of Metaldyne Performance Group Inc. (MPG) in April 2017, set against a backdrop of significantly increased post-acquisition leverage.
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