Moody's rates Cooper-Standard notes B3, Caa3

Moody's Investors Service said it rated Cooper-Standard Automotive Inc.’s new senior secured first-lien notes maturing 2027 B3 and new secured third-lien notes maturing 2027 Caa3. The agency also revised the outlook to stable from negative.

Concurrently Moody’s appended an /LD designator to the company’s Caa2 probability rating. The designator indicates a limited default stemming from Cooper-Standard’s recent debt exchange. The /LD designator will be removed after three business days. The agency also affirmed the issuer’s Caa2 ratings and the Ca rating on the non-tendered senior unsecured notes due 2026. The SGL-4 speculative grade liquidity rating is unchanged.

“The rating actions follow Cooper-Standard's execution of a recent refinancing of its capital structure. The transaction was initiated by an exchange for the $400 million senior unsecured notes due 2026 for $357 million of new secured notes maturing 2027.

“Moody's considers this debt exchange/refinancing as a distressed exchange, which is an event of default under Moody's definition,” the agency said in a statement.

“The affirmation of the Caa2 CFR and change in outlook to stable reflects Moody's expectation for continued weak operating results within an increasingly challenging macroeconomic environment. Lingering supply chain issues, primarily due to semiconductor and parts shortages, are easing but continue to disrupt automotive original equipment manufacturer (OEM) production runs,” Moody’s said.

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