S&P affirms ArvinMeritor ratings

Standard & Poor's said it affirmed its BB+ corporate credit and senior unsecured debt ratings on ArvinMeritor Inc. and related entities and removed the ratings from CreditWatch.

The outlook is negative.

S&P said the ratings on ArvinMeritor reflect the company's average business profile, which is characterized by exposure to cyclical and highly competitive end-markets, and a relatively weak financial profile that is expected to strengthen over the next one to two years.

Following termination of its unsolicited takeover offer for Dana Corp. (BB/watch positive/--), ArvinMeritor is expected to pursue an organic growth plan, supplemented on occasion with tuck-in acquisitions. Material debt-financed acquisitions are not expected and are not factored into the ratings, the agency said.

S&P said liquidity is ample. At Sept. 30, cash and cash equivalents stood at $103 million. ArvinMeritor has two unsecured credit facilities that mature in June 2005: a three-year $400 million revolving credit facility, and a $750 million revolving facility, nearly all of which were available at Sept. 30.

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