Moody’s assigns Garrett Motion Ba3

Moody’s Investors Service said it assigned a Ba3 corporate family rating and Ba3-PD probability of default rating to Garrett Motion Inc.

The agency also gave a Ba2 rating to the senior secured bank credit facilities expected to be entered into by Garrett’s wholly owned subsidiaries Garrett Motion Sarl and Garrett LX I Sarl with Garrett Motion Holdings, Inc. being a co-borrower.

Moody’s said it expects Garrett to secure a $1.25 billion seven-year guaranteed senior secured term loan and a $300 million guaranteed senior secured revolving credit facility.

“The Ba3 rating reflects the strength of Garrett’s underlying operating business and a successful balance sheet restructuring, which will allow the company to emerge from Chapter 11 in the second quarter of 2021,” said Matthias Heck, a Moody’s vice president, senior credit officer and lead analyst for Garrett in a press release. “

The outlook is stable. “The stable outlook reflects the expectation of a continued recovery in global light vehicle sales in 2021, leading to positive FCF generation and continued debt reduction,” added Heck.

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