S&P puts Federal-Mogul on positive watch

S&P said it placed the B- long-term corporate credit and issue ratings on Federal-Mogul LLC and the company's debt on CreditWatch with positive implications.

The CreditWatch placement follows news that Tenneco Inc. will acquire Federal-Mogul from Icahn Enterprises LP for a total consideration of $5.4 billion.

The deal will be funded through cash, Tenneco equity and the assumption of debt, the agency said.

Tenneco also said that it intends to separate the combined businesses into two independent, publicly traded companies through a tax-free spin-off, S&P said.

S&P said it expects the acquisition to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions, with the separation occurring in the second half of 2019.

The agency said it plans to resolve the CreditWatch following completion of the acquisition, which will result in equalizing the ratings with Tenneco.

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