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Allison plagued by debt: analysts lower outlooks, say transmission maker vulnerable to default.

Publication: Indianapolis Business Journal
Publication Date: 30-MAR-09 		Format: Online
Delivery: Immediate Online Access
Full Article Title: Allison plagued by debt: analysts lower outlooks, say transmission maker vulnerable to default.(General Motors Corp. Allison Transmission Div)

Article Excerpt
Local manufacturing stalwart Allison Transmission will have to restructure its more than $4 billion in debt or further cut expenses if it's going to weather the recession.

That's the conclusion of analysts at Moody's and Standard and Poor's, which have issued negative outlooks for Allison, the top commercial truck-transmission supplier.

"The downgrades reflect our concern about Allison's high leverage, which we believe will increase during 2009 because of very weak industry demand," S&P analysts wrote in a research update issued March 10.

The agency lowered its rating from "B+" to "B"--its classification for companies currently able to meet debt obligations but vulnerable to default due to "adverse business, financial or economic conditions."

On Jan. 20, Moody's Investors Service lowered its overall rating from "B2" to "B3," a similar classification. In March, Moody's included Allison on its "Bottom Rung" list of 283 companies most likely to default on debt out of the more than 2,000 it rates.

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