S&P downgrades Metaldyne

Standard & Poor's said it lowered its ratings on Metaldyne Corp., including the corporate credit rating to CCC+ from B-.

The outlook is negative.

The agency said the downgrade and outlook reflect its view that sharply lower production by several automaker customers during the next several quarters, if not longer, will pressure the company's liquidity further, which will test the commitment of parent company Asahi Tec Corp.

The ratings reflect the company's vulnerable business risk profile as a supplier heavily exposed to the Michigan-based automakers and its highly leveraged financial profile characterized by negative cash flow and limited liquidity, S&P said.

Lower automaker production levels have pressured Metaldyne's sales and margins despite the company's leadership position in certain niche market segments, good engineering capabilities and fair customer and platform diversity, the agency added.

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