Moody's lowers ZF view to negative

Moody's Investors Service said it affirmed ZF Friedrichshafen AG's Baa3 long-term issuer rating.

Moody's also has affirmed ZF North America Capital, Inc.'s Baa3 senior unsecured ratings and TRW Automotive Inc.'s Baa3 senior unsecured ratings.

The outlook also was changed to negative from stable.

The negative outlook reflects the initial increase of ZF's leverage due to the proposed debt-financed acquisition of Wabco for $8.5 billion beyond expectation for the Baa3 rating, Moody's said.

The ratings reflect the expectation of a swift de-leveraging with ZF's debt-to-EBITDA moving back to about 3x within about 18 months after closing of the transaction, a level more appropriate for its Baa3 rating, the agency said.

The ratings also consider an expectation that ZF will manage to de-lever swiftly after the transaction and build on the strong track record after the previous acquisition of TRW in 2015, Moody's said.

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