Brexit OE tyre red-alert
Is Brexit going to wreak havoc on the automotive business or is it all just another millennium bug flash-in-the-pan? If a no-deal withdrawal does spell havoc, is it going to impact the tyre business as much as the OEMs?
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Moody’s: “Credit negative for automakers” would result in more factory closures
A no-deal Brexit “will change operating landscape for global auto industry”, according to credit analysts at Moody’s. Specifically they report that they expect Japanese, UK and some German automakers will see profits hit due to 10 per cent auto tariff and through their exposure to production and trade disruptions. And, suggesting that we should expect further closures, they added that the news would affect “production strategies in the UK and across Europe”.
Goodyear share price picks up, hedge funds back Goodyear
Goodyear’s share price picked up by up to 1 per cent during early trading on 12 December 2018, having risen 0.56 per cent by the close of the previous session (up from $21.59 to $21.71). Considering that the value of these shares fell -8.70 per cent during the preceding seven-day period, and experienced a loss of -1.76 per cent over the past 30-day period suggests this is a significant uptick. In addition, when you compare this with the 1.5 per cent one-day drop all tyre majors experienced in October when Michelin warned that demand was softening, it appears that the share price is bouncing back.
Moody’s downgrades American Tire Distributors
On 5 September Moody’s Investors Service downgraded its Probability of Default Rating and senior subordinated notes rating for American Tire Distributors, Inc., to Ca-PD (from Caa3-PD) and C (from Caa3) respectively, following the company’s proposed debt-for-equity exchange offer to holders of the rated notes. All other ratings, including the company’s Caa2 Corporate Family Rating and Caa1 senior secured bank debt (term loan) rating remain under review for downgrade.
Moody’s: US auto parts tariffs credit negative for suppliers
The US imposing tariffs on imported vehicles and auto parts would be broadly credit negative for parts manufacturers that are part of a global supply chain, Moody’s Investors Service says in a new report. Even so, the financial impact to the auto industry stemming from the proposed tariffs — contemplated at up to 25 per cent for imported vehicles and parts — will mainly depend on the extent to which auto parts suppliers’ operations are spread out through the world and their products imported back to the US.
Moody’s report forecasts bleak year for UK car sales
A report from credit agency Moody’s, featured in the Financial Mail on Sunday, predicts that car sales in the UK in 2018 will be the worst in Europe with sales of new cars expected to fall by -5.5 per cent.
Moody’s stabilises auto manufacturing outlook as economic recovery fuels demand
Increased consumer car demand due to improving global economic prospects and a lowering of the rating agency’s sales growth requirements for the sector have changed the outlook on the global auto manufacturing industry over the next 12 to 18 months to stable from negative, says Moody’s Investors Service in a report (“Automotive manufacturing — Global, Outlook update: Changing outlook to stable amid improving business environment”) published 14 March.
Hankook Tire assigned first-time rating from Moody’s and S&P
Hankook Tire has been assigned Baa2 and BBB ratings from the international credit rating agencies, Moody’s and Standard & Poor’s (S&P). This is the first time that the tyre maker has been rated by Moody’s and by S&P, and it comments that this multi-national company level rating “reflects Hankook Tire’s strong position as a global premium tyre brand.”
Hankook Tire assigned first-time rating from Moody’s and S&P
Hankook Tire has been assigned Baa2 and BBB ratings from the international credit rating agencies, Moody’s and Standard & Poor’s (S&P). This is the first time that the tyre maker has been rated by Moody’s and by S&P, and it comments that this multi-national company level rating “reflects Hankook Tire’s strong position as a global premium tyre brand.”
VW reports first quarterly loss in 15 years
The Volkswagen Group has reported third quarter 2015 pre-tax losses of 2.522 billion euros as a result of the emissions scandal the firm is embroiled in. The losses are attributed to 10.2 billion euros of special charges in the first nine months of the year. In addition market observers are concerned about the firm’s continued corporate policy.
Moody’s lifts Continental AG rating to Baa1
Moody’s Investors Service has upgraded its rating for tyre and automotive systems manufacturer Continental AG, and removed the restriction that the company’s rating must remain within three notches above that given to major shareholder Schaeffler AG. This upgrade applies to both the long-term Issuer Rating and the senior unsecured ratings of Continental and its rated subsidiaries, and sees it rise from Baa3 to Baa1.
Moody’s affirms Goodyear rating, says “outlook positive”
Moody’s Investors Service has affirmed Goodyear Tire & Rubber Company’s, Corporate Family Rating at Ba3 and Probability of Default Rating at Ba3-PD. In addition Moody’s has revised the company’s rating outlook to positive from negative. The Speculative Grade Liquidity Rating was affirmed at SGL-2. The news is likely to be interpreted as a signal of improved financial performance at Goodyear, following the publication of good financial results from the US tyremaker yesterday (13 February 2014). The timing of the announcement is also interesting in light of the new that Goodyear and Sumitomo are dissolving their joint venture.
Goodyear Offers $900 Million in Senior Notes
Goodyear Tire & Rubber Co. announced it has commenced a public offering of US$900 million aggregate principal amount of 10-year senior notes. The offering was increased from a previously announced offering size of $750 million.
Troubled Chrysler in New GM Talks, Closing All Plants
Even as Chrysler announced that it was closing all of its plants at least through mid-January, word comes through that merger talks between the privately held automaker and troubled GM have resumed. Chrysler owner Cerberus Capital Management has signaled its willingness to give away part of its ownership in the automaker, according to the Wall Street Journal, which cited parties close to the situation, and merger talks with GM have restarted.
According to the report, Cerberus took the initiative to restart negotiations, which broke down a few weeks ago amid hope of a massive bailout by the Federal government. Earlier yesterday, Chrysler officials said the company was closing down all of its 30 North American plants “until at least 19 January.” The closings will kick in at the end of the day tomorrow.
In a new report, Moody’s Investor Services Inc. said if the U.S. government failed to intervene and all three automakers were to collapse into bankruptcy, it would lead to an estimated 2.5 million job losses by 2010 in the United States, cost the government there up to $250 billion, and cost the car companies about 20 per cent of their combined marketshare. Even a small bailout plan, such as that rejected by Congress last week, said Moody’s, would not be enough to allow GM or Chrysler to recover long-term. (Tire Review/Akron)
GITI Tire Issue Completed
Pricing of GITI Tire’s $200 million secured note concluded a day late on 19 January in Hong Kong. The bond will list in Singapore. Apart from helping its parent, the proceeds are expected to be used for capital expenditure, general corporate purposes and possible acquisition of other tyre businesses.
