Fitch upgrades American Axle

Fitch Ratings said it upgraded the issuer default ratings of American Axle & Manufacturing Holdings, Inc. and its American Axle & Manufacturing, Inc. subsidiary to BB- from B+.

Fitch also said it upgraded American Axle & Manufacturing’s senior unsecured notes rating to BB- from B with a recovery rating of RR5 and affirmed its secured revolving credit facility and secured term loan A at BB+.

The outlook on both companies is stable.

The upgrades are supported by the fundamental improvement in the drivetrain and driveline supplier’s credit profile over the past several years, Fitch said.

The company continues to benefit from strong pickup truck and sport-utility vehicle production at its largest customer, General Motors Co., while it also continues to diversify its overall book of business, the agency said.

Looking ahead, Fitch said it continues to expect American Axle’s business to become further diversified, which will lessen the company’s outsized reliance on GM’s U.S. light truck production, Fitch said.

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