Moody’s shifts Cooper Tire view to stable

Moody’s Investors Service said it revised the outlook for Cooper Tire & Rubber Co. to stable from under review. The agency also confirmed Cooper’s Ba3 ratings and B1 senior unsecured bond rating but raised the speculative grade liquidity rating to SGL-2 from SGL-3.

“The stable outlook reflects Moody’s belief that Cooper Tire’s strong cash balances support operating flexibility enabling the company to manage operations as consumer demand for aftermarket tires gradually recovers along with increasing production at Cooper Tire’s manufacturing operations,” the agency said in a press release.

The speculative grade upgrade reflects the expectation of a good liquidity profile through into next year supported by cash and the forecast of positive free cash flow (cash from operations minus capital expenditures minus dividends). Free cash flow to debt should be in the double-digit range for 2020, Moody’s said.

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