S&P rates Delphi Automotive debt 'BB'
NEW YORK—Standard & Poor's Ratings Services gave a "BB" rating to Delphi Automotive PLC on Tuesday, which completed an initial public stock offering last week.
S&P said the offshoot of General Motors Co. would keep debt down and had reduced costs through bankruptcy enough to boost profits over the next two years.
It said the company as adequate liquidity and no large debt maturities looming soon.
Delphi, which makes transmission controls, heating and air conditioning systems and other components, was spun off from GM in 1999, went into bankruptcy protection in 2005. It emerged four years later after cutting thousands of jobs and selling plants and businesses.
The new company is smaller and carries less debt than the old one, and it's looking to sell parts to foreign carmakers, especially in China.
Proceeds from the IPO went to investors who sold shares, so S&P doesn't expect that the IPO will reduce Delphi's debt, which was $2.2 billion as of Sept. 30.
In the first nine months of this year, Delphi earned $911 million, up 49 percent from the same period last year.
The shares, which opened at $22 on the first day of trading last Thursday, closed Tuesday at $19.90, down 40 cents on the day.