Creditflux Newsletter

Moody's yesterday upgraded German automotive parts firm Continental from B1 to Ba3 as the company has significantly improved its liquidity profile following the successful refinancing of its credit facilities leading to a well balanced maturity profile of its outstanding debt. The firm also enjoyed a stronger than anticipated recovery in its operating performance for 2010.

The stable outlook incorporates the expectation that Continental will continue to generate positive free cash flows in the coming years which would be applied to debt reduction and the operating performance and cash flow generation will sustainably improve further. Overall this should lead to further improvements to the leverage ratio, says Moody's.

Headquartered in Hanover, Germany, Continental is one of world's leading suppliers of automotive brake systems, chassis, and safety systems, and also has a major tyre operation, with Continental being the world's fourth largest tyre manufacturer.