DBRS Releases Commentary on Liquidity in the Automotive Industry

DBRS has today published a commentary on debt and liquidity in today’s automotive sector. “The automotive industry is widely characterized as undergoing a significant liquidity crisis,” says Robert Streda, Vice President of Industrials. “We do not disagree with this assessment, as the liquidity profiles of several automotive issuers have been adversely affected by the sharp contraction in global automotive sales. However, the liquidity positions of the higher-rated companies do remain solid despite the pronounced downturn.”

The commentary examines the debt profiles and liquidity trends among original equipment manufacturers (OEMs) in the North American, European and Asian markets. Going forward this year and into 2010, DBRS observes that, by and large, upcoming debt maturities do not represent the primary burden on the automotive OEMs’ respective liquidity profiles; instead it is cash burn that is the main concern.

The applicable methodologies are Rating Automotive and Rating Automotive Suppliers, which can be found on our website under Methodologies.

This is a Corporate rating.

A copy of this commentary is available by contacting us at info@dbrs.com.