November 28, 2012 / 2:50 PM / 5 years ago

TEXT-S&P rates Meritor Inc's notes 'B-'

2 Min Read

Nov 28 - Standard & Poor's Ratings Services today assigned its 'B-' issue
rating and '5' recovery rating to Troy, Mich.-based commercial truck part
supplier Meritor Inc.'s proposed $150 million senior unsecured
convertible notes due 2026, issued under Rule 144A without registration rights.
The '5' recovery rating indicates our expectation of modest (10% to 30%)
recovery in the event of a payment default. Meritor has indicated that it will
use the net proceeds from the proposed note offering to repay outstanding debt.

The 'B' corporate credit rating on Meritor reflects our assessment of the 
company's financial risk profile as "highly leveraged" with debt to EBITDA of 
5.9x and the business risk profile as "weak" with exposure to the highly 
cyclical commercial-vehicle markets. Although the company has improved its 
operational performance, we expect that economic activity will remain weak in 
Europe and Latin America in 2013. 

RELATED CRITERIA AND RESEARCH
     -- Criteria Guidelines For Recovery Ratings On Global Industrials 
Issuers' Speculative-Grade Debt, Aug. 10, 2009
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008


RATINGS LIST 

Meritor Inc.
 Corporate Credit Rating                          B/Stable/--

Meritor Inc.
 $150 mil sr unsecd convertible notes due 2026    B-
  Recovery Rating                                 5

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

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