Lear announced new bank loans and a European joint venture last week ... and Standard & Poor's was underwhelmed.
The credit rating agency lowered Lear's rating three notches, to B+, in expectation of substandard 2006 earnings and Lear's report of a 2005 net loss of $1.38 billion, including special charges of $1.1 billion. The company also announced last week that it was suspending its dividend.
S&P said the Southfield, Mich., seat maker is too dependent upon General Motors and Ford, which are cutting production and losing market share.
On a positive note, Lear got commitments from four big lenders for $800 million in secured loans. It also agreed to transfer its European interior products operations to International Automotive Components Group in exchange for a 34 percent stake in the joint venture, which was formed by billionaire Wilbur Ross and Franklin Mutual Advisers.