S&P puts Commercial Vehicle on watch

Standard & Poor's said it placed the ratings of Commercial Vehicle Group Inc., including the BB- corporate credit rating, on CreditWatch with negative implications following the company's sharply reduced earnings guidance for 2007.

The CreditWatch action reflects the agency's concerns that much weaker-than-expected performance during the downturn in the commercial-truck market, apparently exacerbated by unfavorable product mix shifts and significant original equipment volume volatility, may harm the company's credit profile more than previously expected.

In addition, in the second half of 2007, a financial covenant violation under the company's bank facility is possible, which could be more difficult to resolve in an uncertain financial market. S&P noted that Commercial Vehicle has virtually no draws on its $100 million revolver.

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