NEW YORK—Moody's Investors Service on Thursday raised its non-investment grade corporate family rating and probability of default rating for Lear Corp. by one notch to Ba2 from Ba3, predicting that the continued growth in vehicle sales will boost its finances.
Moody's also raised its rating for the auto supplier's guaranteed unsecured notes to Ba2 and affirmed its speculative grade liquidity rating at SGL-2. The outlook on the ratings is stable and about $700 million in debt is affected.
The ratings service said Southfield, Mich.-based Lear's financial performance should continue to improve as vehicle sales volumes rise.
"Lear's reduced debt levels, strong liquidity, and improved cost structure since emerging from Chapter 11 reorganization in 2009 have contributed to its strong credit metrics, and the company is well positioned to pursue growth opportunities," Moody's said in a news release.
The ratings service said Lear's strong finances will likely moderate down the road, with the company probably using some of its cash for business investments or shareholder returns, but they should still support a Ba2 rating.
In afternoon trading, Lear shares fell 45 cents to $47.29.
