S&P puts BorgWarner on watch

Standard & Poor's said it placed BorgWarner Inc.'s A- corporate credit rating, along with those of 14 other North American auto suppliers, on CreditWatch with negative implications as a result of the company's significant exposure to General Motors Corp. (CCC+/negative), Ford Motor Co. (B-/Watch negative) and Chrysler LLC (CCC+/negative).

The watch reflects the increasingly beleaguered state of Michigan-based automakers and the multiple scenarios that could play out over the next few weeks or months, according to the agency.

Suppliers placed on watch span a wide range of credit quality and have varying degrees of exposure to the Michigan-based automakers, the agency said.

Certain companies will be able to withstand the liquidity shock of a sudden bankruptcy filing by one or more of the manufacturers, but they may not be able to do so at current rating levels, S&P said.

Many of the companies face business and financial challenges that, although not directly related to the domestic automakers' production schedules, reflect the broader challenges affecting vehicle demand in the U.S. and Europe, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.