Moody’s upgrades Meritor

Moody's Investors Service said it upgraded Meritor, Inc.'s ratings including the corporate family and probability of default to Ba3 and Ba3-PD, from B1 and B1-PD, respectively, and the senior unsecured to B1 from B2.

The agency affirmed the speculative grade liquidity rating at SGL-2.

The outlook was revised to stable from positive.

The upgrade reflects expectations that Meritor will grow its profits and further expand the margins as North American truck builds are projected to be strong through 2019, Moody’s said.

Moreover, given the direct exposure to the cyclical commercial truck build rates, Moody's said it anticipates that Meritor will continue taking measures to plan for the next downcycle by using its cash flow to opportunistically reduce debt and to build liquidity.

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