Fitch: No Change to TRW Automotive Ratings After Announced Acquisition of Dalphi Metal Espana SA

NEW YORK--Sept. 7, 2005--Fitch currently rates TRW Automotive (TRW) as follows:

-- Senior secured debt 'BB+';

-- Senior unsecured debt 'BB-';

-- Subordinated debt 'B+';

-- Outlook Stable.

Despite the turbulent North American industry environment since the beginning of 2005, the company has been cash flow positive, benefiting from its focus on technologies that meet customer needs for safety and fuel economy, as well as a significantly diverse customer base and geographic sales mix.

TRW today announced a definitive agreement to acquire 68.4% of Dalphi Metal Espana SA (Dalphimetal) plus assumption of Euro-denominated debt for a total of US$240 million. The company intends to use current liquidity to finance the acquisition of Dalphimetal. Fitch believes that post-acquisition debt balances and credit metrics would be within the current rating category and that the acquisition only defers further expected debt reduction from free cash flow. In addition to debt reduction, Fitch will continue to monitor TRW for progress in the integration of Dalphimetal as well as other fundamentals, including the impact of industry production volume and new business wins resulting from OEM customer's focus on safety and fuel economy as well as raw material cost pressures.

At the end of the second quarter, TRW had a cash balance of $519 million. Liquidity also consisted of approximately $1.2 billion in undrawn facilities, including a secured revolver and accounts receivable securitization programs. Free cash flow (FCF) debt service coverage and FCF-to-total adjusted debt were 2.5 times (x) and 16.4%, respectively. Even though the North American auto industry has been challenging in 2005, for the trailing 12 months, TRW has been free cash flow positive and has reduced debt, both in excess of $500 million.

Dalphimetal manufactures airbags and steering wheels, which increases TRW's global presence in passive safety systems. It also provides TRW with greater customer and geographic diversity, further reducing the company's reliance on the domestic Big Three automakers. There is very little in the way of facility overlap due to Dalphimetal's customer base. As a result, Fitch believes that minimal restructuring actions are required for TRW to achieve acquisition synergies.

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