(The following statement was released by the rating agency)
Sept 26 - Standard & Poor’s Ratings Services said today that its ratings and outlooks on Germany-based auto suppliers Schaeffler AG (B+/Stable/--) and Continental AG (BB-/Positive/B) are unchanged following the announcement of Schaeffler’s sale of a portion of its stake in Continental, amounting to 10.4% of Continental’s share capital, for about EUR1.6 billion in cash proceeds. Schaeffler owned this stake in trust with third-party banks. Although the transaction will improve credit metrics for Schaeffler, the company will likely maintain its leverage ratio (adjusted debt to EBITDA) above 5x, which would remain in line with our guideline for the current ‘B+’ rating.
With regard to Continental, we continue to apply our parent subsidiary criteria to determine the ratings since we view Schaeffler’s ability to influence Continental as unchanged. On this topic, see “ Credit FAQ: What Prompted Our Recent Upgrade Of German Automotive Supplier Continental?,” published May 22, 2012, on RatingsDirect on the Global Credit Portal.