S&P puts Schaeffler on positive watch

Standard & Poor’s said it placed its BB- corporate credit ratings on Schaeffler on CreditWatch with positive implications. Members of the group include: Schaeffler AG, Schaeffler Holding Finance BV and Schaeffler Verwaltung Zwei GmbH.

At the same time, S&P placed all existing BB- issue ratings on the group’s senior secured debt on CreditWatch with positive implications. The recovery rating on these facilities remains unchanged at 3, with recovery prospects in the case of a payment default expected to be in the lower half of the 50%-70% range.

S&P also placed the B issue ratings on Schaeffler Finance BV’s senior unsecured debt and Schaeffler Holding Finance BV’s senior secured payment-in-kind toggle notes on CreditWatch positive. The recovery rating on these debt instruments remains at 6.

S&P expects to withdraw the issue ratings on Schaeffler Holding Finance BV’s senior secured PIK toggle notes if the notes are repaid in full.

The CreditWatch placement follows the group's announcement that it plans an equity transaction to reduce debt, S&P said in a news release.

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