Troubled Auto Suppliers Get Up To $5 Billion From U.S. Government, But Credit Improvement Is Still A Long Way Off

Standard & Poors, March 2009

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Abstract
On March 19, 2009, the U.S. Treasury Department announced a new $5 billion program intended to provide much-needed liquidity to the domestic auto suppliers. This is the latest federal government initiative aimed at supporting the ailing automotive sector, efforts that Standard & Poor's Ratings Services believes will aid the industry but not, by themselves, reverse the deterioration of credit quality. Using funds from the Troubled Asset Relief Program (TARP), the program will allow qualifying suppliers to sell certain accounts receivable to the government (at an unspecified discount). The arrangement is similar to a factoring program,, but here, the government acts in lieu of traditional bank purchasers because of what we believe is a lack of demand for the Michigan-based automakers'...

Companies mentioned in this report are: Delphi Automotive LLP

Delphi Automotive LLP

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