Moody's rates Adient loan, notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to Adient US LLC's proposed $750 million senior secured term loan and a Ba2 rating to the company's proposed $750 million senior secured notes.

Adient US is a U.S. holding and operating company of Adient Global Holdings Ltd.

Moody's also said it affirmed Adient's corporate family rating at B2 and probability of default rating at B2-PD.

The agency also affirmed Adient's existing senior secured ratings at Ba2, senior unsecured ratings at B3 and speculative grade liquidity rating at SGL-3.

The outlook remains negative.

The proposed $1.5 billion of new senior secured debt, along with a proposed $1.25 billion asset based revolving credit facility, will be used to refinance the existing $1.2 billion senior secured term facility and $1.5 billion senior secured revolving credit facility. The proposed will also add about $345 million of cash to Adient's balance sheet.

The proposed senior secured term loan facility and senior secured note will not have financial maintenance covenants, Moody's said.

The proposed transaction is a credit positive as it provides additional liquidity to Adient's balance sheet, provides additional operating flexibility through the elimination of the financial maintenance covenants under the existing bank credit facilities since that debt will be repaid and extends debt maturities, the agency said.

While the new asset based revolving credit facility will have a springing fixed charge ratio test, Moody's said, it believes that the springing trigger is unlikely to occur over the next 12- to 15-months.

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