DOW JONES NEWSWIRES
Tenneco Inc. (TEN) won changes in the financial covenant ratios
on its senior secured credit facility from its senior lenders and
renewed its U.S. securitization facility as it looks to navigate
the woes facing the global auto industry.
Auto suppliers such as Tenneco are in a precarious spot as U.S.
auto makers pare swollen inventories, particularly in North
America. Earlier this month, Tenneco, which makes shock absorbers,
suspensions and manifolds, said its fourth-quarter net loss widened
amid restructuring charges.
Last week, Moody's Investors Services lowered its credit ratings
on the company to the verge of highly speculative territory, citing
the potential for further erosion of the auto-parts maker's credit
metrics amid the dramatic deterioration in global automotive
production levels.
The covenant changes begin with first quarter of this year and
continue through the second quarter of 2011. The compliance ratios
the company must meet are a maximum leverage ratio and a minimum
interest coverage ratio. Fees and amendment costs under Monday's
amendments are expected to total $8 million.
Tenneco also said it renewed its U.S. securitization facility in
the amount of $100 million through Feb. 22, 2010. The company's
limit for securitizing receivables under its credit facilities is
$250 million.
Tenneco's shares closed Monday at $1.20, down 5.5%, and were
unchanged in after-hours trading.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com