CHICAGO--(BUSINESS WIRE)--Fitch Ratings has withdrawn its ratings on TRW Automotive Holdings Corp. (TRW) and its TRW Automotive, Inc. (TAI) subsidiary following the closing of ZF Friedrichshafen AG's (ZF) acquisition of TRW. The companies announced that the acquisition closed on May 15, 2015. See the summary of the ratings that have been withdrawn at the end of this release.
Now that the acquisition has closed, TRW is a wholly-owned, indirect subsidiary of ZF. As a private company, ZF has largely financed the $12.4 billion acquisition through a combination of incremental bond and bank debt. Fitch believes TRW's ratings should reflect the credit profile of the post-acquisition merged ZF. However, Fitch does not rate ZF, and, therefore, Fitch does not have sufficient information to continue rating TRW. Based on a high-level analysis, Fitch believes ZF's post-acquisition credit profile would be consistent with an Issuer Default Rating (IDR) in the 'BB' range.
In connection with the closing, TAI has terminated its credit agreement and based on the change of control provisions present in TAI's bond indentures, Fitch expects the company to be required to offer to repurchase its remaining senior unsecured notes for 101% of their principal amount. As of April 3, 2015, TAI had a total of $1.2 billion in principal amount outstanding on its three series of senior unsecured notes. (In April 2015, the remaining exchangeable notes that were outstanding at the end of the first quarter were either exchanged for TRW shares or redeemed by TAI.) Going forward, Fitch does not expect TRW to be an active issuer in the public capital markets, with any significant future debt likely to be issued by ZF.
The following ratings were on Rating Watch Negative and have been withdrawn:
TRW:
--Long-term IDR 'BBB-'.
TAI:
--Long-term IDR 'BBB-';
--Unsecured revolving credit facility 'BBB-';
--Senior unsecured notes 'BBB-'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage (May 28, 2014).
Applicable Criteria and Related Research:
Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749393
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=984727
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.