S&P downgrades Remy International

Standard & Poor's said it lowered its ratings on Remy International Inc., including its corporate credit rating to CCC+ from B- , $160 million first-priority senior secured bank facility to B- from B, $125 million second-priority senior secured floating-rate notes to CCC from CCC+ and $460 million in senior subordinated notes to CCC- from CCC.

The outlook is negative.

The downgrade reflects Remy's downward EBITDA trend, illustrated by its much weaker-than-expected $11.5 million third-quarter EBITDA, S&P said. Remy's EBITDA for 2005, which the company estimates will be about $60 million, will fall meaningfully below prior estimates and be insufficient to cover interest expense.

The ratings also reflect Remy's very aggressive leverage and its vulnerable business profile. Remy's business profile assessment reflects the company's exposure to the cyclical and highly competitive automotive and commercial vehicle end markets and its relatively narrow product line, the agency said.

S&P said these business weaknesses are mitigated by the company's strong market position, by the diversity of its end markets and by its strong brand names.

Citigroup Venture Capital Equity Partners LP controls privately held Remy, which had $710 million of total balance sheet debt at Sept. 30.

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