Moody's lifts Schaeffler, notes

Moody's Investors Service said it upgraded Schaeffler AG's corporate family rating to Ba3 from B1 and the probability of default rating to Ba3-PD from B1-PD.

Concurrently, Moody's upgraded Schaeffler AG's and Schaeffler Finance BV's loans and senior secured notes to Ba2 with a loss given default assessment of LGD3-37% from Ba3 and the senior secured notes issued by Schaeffler Holding Finance BV to B1 LGD5-75% from B2.

The outlook is stable.

"The upgrade to Ba3 was triggered by Schaeffler's successful placement of 3.9% of its shares held in Continental AG and to apply the proceeds of approximately €950 million as well as additional €325 million from excess free cash flow to reduce its indebtedness," Falk Frey, Moody's senior vice president and lead analyst for Schaeffler, said in a news release.

"As a result of the transaction, Schaeffler's credit metrics will improve to levels which position the company solidly in the Ba3 rating category in our opinion."

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