S&P lowers Schefenacker

Standard & Poor's said it lowered its long-term corporate credit rating on Schefenacker AG to B- from B, reflecting concerns about the company's weak financial performance.

The rating on the €200 million senior subordinated bonds was lowered to CCC from CCC+, reflecting their subordination to all existing and future priority debt.

The outlook is negative.

The downgrades reflect S&P's view that Schefenacker's very aggressive leverage increases the company's vulnerability to negative surprises in the challenging industry environment for automotive suppliers. In addition, S&P said it believes that Schefenacker's free operating cash flow generation in 2005 is likely to be negative.

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