Moody's lifts TRW to SGL-1

Moody's Investors Service said it upgraded TRW Automotive, Inc.'s speculative grade liquidity rating to SGL-1 from SGL-2, affirmed the company's Ba2 corporate family and probability-of-default ratings and Ba3 (LGD5, 72%) senior unsecured notes and assigned Baa3 (LGD2, 17%) ratings to its new senior secured credit facilities, which include a $900 million domestic revolving credit facility, a $500 million global revolving credit facility, a $600 million senior secured term loan A and a $500 million senior secured term loan B.

The outlook is stable.

TRW plans to use the proceeds from the new bank facilities to refinance the existing senior secured credit facilities, which are rated Ba1 (LGD2, 26%).

The bank credit facility refinancing continues TRW's efforts to opportunistically extend its debt maturity profile and reduce debt service costs, the agency said, and its ratings reflect its leading position as a supplier of components and systems to automotive original equipment manufacturers, its well-diversified revenue base and Moody's view that continuous investment in new technologies should support future revenues, even as automotive demand softens.

However, TRW has experienced the effects of ongoing pricing pressures from original equipment manufacturers customers and commodity price increases, and its debt-to-EBITDA ratio was 3.5x for the last 12 months ended Dec. 31, Moody's said.

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