S&P upgrades Tenneco

Standard & Poor's said it raised Tenneco Inc.'s corporate credit rating to BB- from B+, first-lien senior secured debt to BB- from B+ and subordinated debt and second-lien senior secured debt to B from B-. The ratings were also removed from CreditWatch with positive implications, where they were placed on Jan. 30. The outlook is stable.

S&P said the upgrade reflects its view that Tenneco's recent performance in a very difficult environment for auto suppliers supports a higher rating, as do the company's business and financial prospects for 2006 and beyond. Despite the difficult environment, Tenneco's credit measures improved in 2005 as the company benefited from the good diversity among its customers, business platforms and regions of operation.

However, the agency said Tenneco it is still exposed to the production problems of its large customers General Motors Corp. and Ford Motor Co., and potential near-term work stoppages at auto supply companies Delphi Corp. or Tower Automotive Corp. could affect the entire industry.

Tenneco's debt to EBITDA was about 4.1x at Dec. 31.

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