Fitch rates Delphi notes BBB

Fitch Ratings said it assigned a rating of BBB to Delphi Automotive plc's proposed issuance of $300 million in senior unsecured notes due 2046.

The company currently has an issuer default rating of BBB and a stable outlook.

The proposed notes will be fully guaranteed on a senior unsecured basis by the same subsidiaries that guarantee the senior unsecured notes and unsecured credit facility of Delphi Automotive’s Delphi Corp. subsidiary, removing any structural subordination concerns, Fitch explained.

Delphi has an issuer default rating of BBB, along with a BBB rating on its unsecured revolving credit facility and BBB rating on its senior unsecured notes.

The proceeds from the proposed notes, along with the proceeds from Delphi’s recent issuance of €500 million 1.6% senior unsecured notes due 2028, will be used to fund the redemption of Delphi's $800 million in 5% senior unsecured notes due 2023, the agency said.

The ratings reflect the group’s relatively strong credit profile as it continues to leverage its market position in advanced automotive technologies, Fitch said.

The company's focus on electrical architecture, safety, and advanced power train technologies has put it at the forefront of important growth trends in the global auto industry, the agency said.

Rating concerns include the cyclical nature of the global auto industry, intense industry competition, potentially volatile raw material costs and new entrants into the automotive technology sector, Fitch said.

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