S&P: Garrett Motion off watch

S&P said it affirmed the BB- ratings on Garrett Motion Inc. and its secured debt, as well as the B issue ratings on its unsecured notes. The agency also removed all the ratings from CreditWatch with negative implications.

The affirmations and removal from negative watch follow the company amending its loan covenants. “We think the covenant amendment negotiated with its lenders in June 2020 will allow Garrett to recover sufficient covenant headroom of at least 15%,” S&P said in a press release.

“Between second-quarter 2020 and second-quarter 2022 (the relief period), the group will be tested against the ratio of senior secured net debt to last-12-months (LTM) EBITDA instead of consolidated debt to LTM EBITDA as before,” the agency said.

The outlook is negative.

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