Moody’s downgrades Garrett Motion

Moody’s Investors Service said it downgraded the long term corporate family rating of Garrett Motion Inc. to B2 from B1 and the probability of default rating to B2-PD from B1-PD.

Concurrently, Moody’s downgraded to B2 from B1 the senior secured bank credit facilities ratings of the company’s subsidiaries Garrett LX III Sarl and Garrett Motion Sarl. Moody’s also downgraded the senior unsecured rating of Garrett LX I Sarl to Caa1 from B3. All ratings are placed on review for downgrade. The outlook on all entities has been changed to ratings under review from negative.

“The downgrades reflect Garrett’s announcement to explore alternatives for balance sheet restructuring which in our view signals a more aggressive stance to managing its liabilities which may be at the detriment of noteholders,” said Matthias Heck, a Moody’s vice president, senior credit officer and lead analyst for Garrett, in a press release.

“The review is focused on the outcome of the company’s exploration, which could result in a further downgrade,” added Heck.

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