Moody’s changes Meritor view

Moody’s Investors Service said it revised Meritor, Inc.'s outlook to positive from stable and affirmed all of the ratings, including the corporate family and probability of default at B1 and B1-PD, respectively, and senior unsecured rating at B2.

The agency also affirmed Meritor's speculative grade liquidity rating at SGL-2.

“Meritor's positive outlook reflects the company's improved leverage and debt service profile resulting from debt reductions with asset sale proceeds combined with recovering conditions in the U.S. commercial vehicle markets,” Moody’s said in a news release.

Following the sale of the company's interest in Meritor Wabco Vehicle Control Systems in October for $250 million, a portion of the proceeds were used to reduce long-term debt.

“Meritor's financial performance is also benefiting from improving build rates in the commercial vehicle industry, particularly in North America where build rates for class 8 vehicles are expected to grow about 30% in 2018,” the agency said.

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