S&P downgrades TRW

Standard & Poor's said it lowered TRW Automotive Inc.'s corporate credit rating to B from B+, senior secured debt to B+ from BB and senior unsecured debt to CCC+ from B. The recovery ratings were revised to 2 from 1 for the senior secured debt and to 6 from 5 for the senior unsecured debt.

All ratings were removed from CreditWatch, where they had been placed with negative implications on April 30, and the outlook is negative.

The agency said the downgrade reflects its view that the very weak global market for light vehicles for 2009 and 2010 will cause TRW to use far more cash in 2009 and 2010 than expected for the previous rating.

The current rating reflects S&P's assumption that TRW will be successful in obtaining an amendment to the credit facility that is required for the company to remain in compliance with covenants at June 30. If it does not obtain the amendment, it would likely breach its covenants at the end of the second quarter, the agency said, triggering another downgrade.

The adjusted leverage ratio was 5.2 times for the 12 months ended April 3.

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