Fitch upgrades Tenneco issuer default rating to ‘B’ on better earnings, new share issuance
By APThursday, November 19, 2009
Fitch upgrades Tenneco ratings on better earnings
NEW YORK — Fitch Ratings on Thursday upgraded the issuer default rating on auto parts maker Tenneco Inc. by one notch thanks to cost-cutting, a better auto-making environment and a capital-raising effort that should reduce debt.
The outlook is stable.
Fitch upgraded the issuer default rating to “B” from “B-” and also upgraded ratings by one or two notches on a wide variety of notes, credit facilities and liens totaling $1.4 billion in debt.
The “B” rating is still five steps into junk territory.
The upgrades were supported by improvements in earnings before interest, taxes, depreciation and amortization, Fitch said.
The ratings agency also noted positively that Tenneco, based in Lake Forest, Ill., is expecting a new issuance of 12 million shares to raise net proceeds of $187 million, which it plans to use to pay back debt under its revolving credit facility. The offering is expected to close Nov. 24.
Tenneco shares were down $1.35, or 7.9 percent, at $15.64 in late afternoon trading Thursday.
