S&P puts Adient on watch

S&P put all of its ratings for Adient plc on watch with negative implications.

As a result of the pandemic and the resulting economic pressure, the agency lowered its regional light-vehicle sales forecast. It projects sales to fall 15%-20% in the U.S. and Europe and 8%-10% in China.

The negative placement reflects S&P’s view that there is at least a 50% chance it will lower its ratings on Adient by one notch if its plants remain idle for longer than expected, causing its cash flow generation to turn negative, eroding its liquidity, and increasing its debt leverage with no signs of an imminent improvement.

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