Moody's eyes European auto parts suppliers for cuts

Moody's Investors Service said it placed the ratings of 14 European Automotive parts suppliers under review for downgrade. This includes the following eight issuers: Aptiv plc, Autoliv Inc., Faurecia, Hella GmbH & Co KGaA, Kongsberg Automotive ASA, Novem Group GmbH, Schaeffler AG and Valeo SA.

Concurrently, Moody's said it downgraded the ratings of the following six issuers by one notch: Adler Pelzer Holding GmbH to B1 from B2, Garrett Motion to B1 from Ba3, Gestamp Automocion, SA to Ba3 from Ba2, Grupo Antolin to B3 from B2, IHO-Verwaltungs GmbH to Ba2 from Ba1 and ZF Friedrichshafen AG to Ba1 from Baa3.

As a result of the downgrades, Moody's said it withdrew the issuer rating and assigned corporate family rating to ZF Friedrichshafen, in line with the rating agency's policy for non-financial corporates with non-investment grade ratings downgraded from investment-grade ratings. The ratings of these six issuers are under review for further downgrade.

"The rapid and widening spread of the coronavirus outbreak is creating a severe and extensive credit shock for European automotive parts suppliers," said Matthias Heck, a vice president and senior credit officer at Moody's, in a press release.

"We have downgraded ratings of companies which were already weakly positioned in their respective ratings ahead of the current market stress, and our review for downgrade processes will focus on the impact on manufacturing operations, consumer demand, as well as governmental support and mitigating measures being taken by the individual issuers," he said.

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