Research Update: U.S.-Based Auto Supplier Garrett Motion Inc. Assigned 'B+' Preliminary Rating; Outlook Stable

On March 12, 2021, the U.S. bankruptcy court for the Southern District of New York approved the disclosure statement related to the Chapter 11 plan of Garrett Motion Inc. (GMI) and its affiliated debtors, with a final hearing regarding the plan's confirmation scheduled for April 23, 2021. We anticipate the plan, sponsored by Oaktree Capital Management L.P. (Oaktree) and Centerbridge Partners L.P. (Centerbridge) will be implemented as is, and no major deviation will be considered. Pro-forma emergence from bankruptcy, we forecast S&P Global Ratings-adjusted debt to EBITDA of about 7.5x in 2021 and 6.0x-7.0x in 2022--about 4.5x-5.5x and 3.5x-4.0x, respectively, excluding approximately $1.3 billion of convertible series A preferred stock (preference shares A), which we view as debt-like under our

...- On March 12, 2021, the U.S. bankruptcy court for the Southern District of New York approved the disclosure statement related to the Chapter 11 plan of Garrett Motion Inc. (GMI) and its affiliated debtors, with a final hearing regarding the plan's confirmation scheduled for April 23, 2021. - We anticipate the plan, sponsored by Oaktree Capital Management L.P. (Oaktree) and Centerbridge Partners L.P. (Centerbridge) will be implemented as is, and no major deviation will be considered. - Pro-forma emergence from bankruptcy, we forecast S&P Global Ratings-adjusted debt to EBITDA of about 7.5x in 2021 and 6.0x-7.0x in 2022--about 4.5x-5.5x and 3.5x-4.0x, respectively, excluding approximately $1.3 billion of convertible series A preferred stock (preference shares A), which we view as debt-like under our criteria, although we acknowledge it has certain equity characteristics. - Based on the available information we are assigning a preliminary long-term 'B+' issuer credit rating to GMI and a preliminary...

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