Fitch gives Iochpe-Maxion; notes BB-

Fitch Ratings said it gave first-time BB- long-term foreign- and local-currency issuer default ratings to Iochpe-Maxion SA and its proposed benchmark-sized unsecured notes. Subsidiaries Iochpe-Maxion Austria GmbH and Maxion Wheels de Mexico, S de RL de CV will sell the notes the parent will guarantee. Also, Fitch assigned Iochpe a national scale rating of A+(bra).

“The ratings reflect Iochpe’s customer and regional diversification as a large global wheels producer and as an important producer of side rails and commercial vehicle frames in the Americas as well as the competitive nature of the wheels industry. They also reflect Iocphe’s more volatile cash flow profile and expectations of net debt/EBITDA declining to the 2.5x range over the next two-three years mainly through recovering EBITDA and positive FCF generation,” Fitch said in a press release.

Proceeds will be used primarily to refinance debt at the issuer level or their subsidiaries and general corporate purposes.

The outlook is stable.

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