S&P downgrades Adient

S&P said it lowered its issuer credit rating on Adient plc to BB- from BB. The outlook is negative.

At the same time, S&P lowered the issue-level rating on the company's senior secured debt to BB+ from BBB-. The 1 recovery rating remains unchanged, indicating an expectation for very high recovery (90%-100%; rounded estimate: 90%) in the event of a default.

S&P also lowered its issue-level rating on the company's senior unsecured debt to B+ from BB-. The 5 recovery rating remains unchanged, indicating an expectation for modest recovery (10%-30%; rounded estimate: 25%) in the event of a default.

“The downgrade reflects the persistent operational inefficiencies in Adient's Seating, Seat Structures & Mechanisms (SS&M), and Interiors businesses as well as the higher commodity costs and foreign-currency headwinds the company has been facing,” S&P said in a news release.

“While Adient's revenue increased by 4% year-over-year in its fiscal fourth quarter, the company reported a 36% decline in its adjusted EBITDA for the same period.”

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