Fitch expects to rate American Axle loan BB

Fitch Ratings said it expects to assign a rating of BB to American Axle & Manufacturing Holdings, Inc.'s upcoming senior unsecured term loan.

The agency currently rates the company at issuer default rating BB, senior unsecured revolving credit facility BB, senior unsecured term loan BB and senior unsecured notes BB.

The outlook is negative.

Fitch said it expects the proceeds from the new $250 million term loan due 2012 to be used to refinance the existing term loan due 2010.

The company's debt leverage ratio will increase to 3.75 times from 3.5 times, the agency said.

The ratings reflect the company's dependence on General Motors Corp. for three-quarters of its revenue and risks associated with industry issues. Offsetting some of the risk is the company's margins, liquidity and competitive position, its recent downsizing and improving cash flow this year.

For 2006, American Axle's ratio of total debt to operating EBITDA was 2.6 times, its total adjusted debt to operating EBITDAR, adjusted for rent, was 2.9 times, and funds from operations adjusted leverage was 3.4 times.

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