Moody's rates American Axle notes B2

Moody's Investors Service said it assigned a B2 (LGD 4, 66%) rating to American Axle & Manufacturing, Inc.'s new $400 million of senior unsecured notes due 2021.

The agency also said it affirmed the company's B1 corporate family rating and B1-PD probability of default rating, senior secured notes at Ba1 and existing senior unsecured notes at B2. The speculative-grade liquidity rating was affirmed at SGL-3.

The debt ratings affirmed include the $340 million senior secured guaranteed notes at Ba1 (LGD 2 11%); $200 million senior unsecured notes due 2019 at B2 (LGD 4 66%); $550 million senior unsecured notes due 2022 at B2 (LGD 4, 66%); and $300 million senior unsecured notes due 2017 at B2 (LGD 4, 66%).

The outlook is stable.

The proceeds of the proposed notes are expected to be used to fund the announced tender offer of its $300 million 7 7/8% senior unsecured notes and for general corporate purposes, including the repayment of outstanding indebtedness, Moody's said.

The ratings reflect the company's sizable position as a driveline systems manufacturer and its $1.25 billion three-year backlog of new business launching from 2013 through 2015, the agency said.

American Axle's revenue growth in 2012 has been supported by recovering automotive industry conditions in North America and the company's growth in backlog of new business, Moody's said.

This trend is expected to continue into 2013 and further support annual growth of about 10%, the agency added.

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