Fitch upgrades TRW

Fitch Ratings said it upgraded TRW Automotive Holdings Corp.'s issuer default rating to B+ from B and TRW Automotive Inc.'s issuer default rating to B+ from B; its senior secured revolving credit facility, senior secured term loan A-2 and senior secured term loan B-3 to BB+/RR1 from BB/RR1; and its senior unsecured notes and senior unsecured exchangeable notes to B/RR5 from B-/RR5.

The outlook is positive.

The agency said the upgrade is supported by TRW's fourth-quarter and full-year 2009 results, which were better than Fitch anticipated, particularly the healthy free cash flow. Despite a very challenging automotive environment during 2009, TRW was able to improve some credit metrics and reduce debt during the year as a result of successful restructuring actions and several capital market transactions.

The positive outlook is driven by Fitch's view that the company's credit profile will continue to improve, the profile could be strong for the new rating over the next 12 months and further positive ratings actions may be warranted if TRW's favorable operating trend persists and if the industry recovery continues.

Credit concerns include TRW's large concentration of sales to Europe, exposure to commodities prices that may prove to be a headwind in the second half of 2010, automotive industry cyclicality and the underfunded pension plan, the agency said.

Fitch calculates the total debt-to-operating EBITDA ratio to be 2.6 times as of the end of 2009.

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