Moody's confirms American Axle

Moody's Investors Service said it confirmed the Baa3 senior unsecured debt ratings of American Axle & Manufacturing Inc. and its parent American Axle & Manufacturing Holdings Inc., but changed the outlook to negative from stable.

Moody's confirmed American Axle's Baa3 senior unsecured rating and Baa3 rated $250 million senior notes due 2014, $600 million bank revolving credit facility and $150 million senior convertible notes due 2024.

Moody's said the action reflects the concern about the impact to American Axle's near term earnings and cash flow from overall weakness in the North American automotive market, the company's exposure to General Motors Corp.'s lower production volumes and the company's need to invest substantial amounts of capital to support the launch of the platform as well as other new business wins.

The company's capital-intensive business model involves meaningful operating leverage, which can make earnings more sensitive to changes in unit volumes, according to Moody's.

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