S&P rates American Axle note BB

Standard & Poor's said it assigned a BB rating to American Axle & Manufacturing Inc.'s proposed $300 million senior unsecured notes due 2017, which will be guaranteed by parent company American Axle & Manufacturing Holdings Inc.

The BB corporate credit and senior unsecured ratings of American Axle and its parent company were affirmed.

The outlook is negative.

Proceeds from the proposed notes are expected to be used to increase cash balances and, in the longer term, for debt reduction.

The agency said the ratings on American Axle reflect the risks associated with the company's heavy dependence on General Motors Corp. SUVs and pickup trucks, current relatively narrow product range, exposure to cyclical and competitive markets and the negative impact on the company's business caused by ongoing competitive challenges facing GM and Chrysler, including declining production volumes for some of the vehicles American Axle serves.

These factors are tempered by American Axle's high market shares, high-value-added product portfolio and good research and development capabilities, S&P said.

The debt-to-EBITDA ratio is about 3.3x.

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