German parts maker spurns new issue ratings, newspaper reports

The Financial Times Deutschland reports that car parts maker Dürr will launch its next bond without a rating, a move interpreted as a rebellion by corporate borrowers against the power of the rating agencies. The articles quotes a company spokesperson as saying that it is dissatisfied with the methodology of the rating agencies.

According to the article, Dürr is planning a new five-year bond issue to refinance debt maturing in July 2011. It says the bonds will be issued without using an investment bank underwriter, targeting private investors in its home market. Forgoing a rating will save the company €100,000 a year, it adds.

The bonds, expected to total around €100 million, will be listed on Bondm, a new segment of the Stuttgart Stock Exchange for corporate bonds issued by small and mid-cap bonds. The company’s existing bonds have been on this listing since May, according to the company’s website, which includes daily prices for the bond (103 today).

The company’s bonds are rated B2 and B by Moody’s and Standard & Poor’s respectively. Both have the borrower on negative outlook.