Cooper-Standard Holdings Inc.

The negative outlook on Cooper-Standard Holdings Inc. reflects the at least one-in-three chance we will downgrade the company in 2021 if the recovery in its demand is weaker than we expect, which would lead us to believe that its financial commitments are unsustainable. We could downgrade Cooper-Standard if its cash burn in 2021 will likely exceed $150 million, its reliance on its credit facility increases, and we do not expect its EBITDA margins will likely improve. We could also lower our rating if the company's FOCF remains negative on a sustained basis and we believe its capital structure is unsustainable over the long term. We could revise our outlook on Cooper-Standard to stable if its end-market conditions recover, enabling it

...We expect global light vehicle sales to continue to recover and reach pre-pandemic levels by the end of 2022 or 2023 with some variation by region. As concerns over the coronavirus pandemic continue to soften, we anticipate Cooper-Standard's consolidated sales will rise by the high single-digit to low double-digit percent range in 2021 on the global recovery in the demand for light vehicles. The company derives the majority of its revenue from North America (51% of sales in 2020), where we expect a stronger increase in its sales supported by pent-up demand, economic stimulus, and a lower starting base due to the significant sales decline it experienced in 2020. We expect more modest rises in its sales in Europe (26% of sales in 2020) and Asia-Pacific (APAC; 21% of sales in 2020) given the regions' differing economic recovery trajectories and the recent resurgence of coronavirus cases in some areas of Europe. We expect sales of light vehicles in China to reach pre-pandemic levels by the...

Full Report