Bulletin: Clarios Global L.P.'s Tax Credits Will Offset Effects Of Proposed Dividend Recapitalization

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) Jan. 6, 2025--S&P Global Ratings today said that though Clarios Global L.P. (BB-/Stable/--) will issue debt to fund a dividend, the company will also receive significant tax credits under section 45X of the Inflation Reduction Act (IRA). Although we don?t have finalized deal terms, we believe the 45X credit will sufficiently offset the increase in debt. Therefore, all our ratings on Clarios are unchanged, including our 'BB-' issuer credit rating and stable outlook. On Aug. 16, 2022, the U.S. enacted the IRA, which includes section 45X advanced manufacturing production credit that could be claimed for battery cells manufactured or assembled in the U.S. and sold to third

...January 6, 2025 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) Jan. 6, 2025--S&P Global Ratings today said that though Clarios Global L.P. (##-/Stable/--) will issue debt to fund a dividend, the company will also receive significant tax credits under section 45X of the Inflation Reduction Act (IRA). Although we don't have finalized deal terms, we believe the 45X credit will sufficiently offset the increase in debt. Therefore, all our ratings on Clarios are unchanged, including our '##-' issuer credit rating and stable outlook. On Aug. 16, 2022, the U.S. enacted the IRA, which includes section 45X advanced manufacturing production credit that could be claimed for battery cells manufactured or assembled in the U.S. and sold to third parties as well as the production of electrode active materials to be used in battery manufacturing. In 2024, Clarios elected to recognize these tax credits under government grant accounting as a reduction of cost of goods sold...

Bulletin