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Tower Automotive Inc. Rated by S&P

9 December 1997

Tower Automotive Inc. Rated by S&P; Outlook Positive

    NEW YORK, Dec. 9 -- Standard & Poor's assigned its
single-'B'-plus rating to Tower Automotive Inc.'s $200 million convertible
subordinated notes due 2003. Additionally, Standard & Poor's assigned its
double-'B' corporate credit rating to the company.
    In addition, Standard & Poor's assigned its double-'B' rating to the
company's $750 million bank facility. Since the facility is unsecured, the
bankers will fare the same as other senior creditors in the event of a
default.
    Ratings reflect Tower's solid market position in the original equipment
automotive industry, offset by concerns regarding the competitive and cyclical
nature of the industry and the risks associated with Tower's aggressive
acquisition strategy. Tower produces modular vehicle structures and suspension
systems. Specific products include full frame and engine cradles; upper body
structural assemblies; suspension systems; mechanical assemblies; precision
stampings; heavy truck frame rails and ladders. Major customers include Ford,
Chrysler, GM, Honda, Mazda, Toyota, Nissan and Fiat. About 63% of revenues
come from products used in light trucks, the fastest growing segment of the
industry.
    Tower achieved its current market position through a series of
acquisitions. The largest of these occurred in April 1997 with the acquisition
of Automotive Products Company (APC), a former division of A.O. Smith and a
business, which had a revenue base twice the size of Tower's at the time of
the acquisition. APC produces lower body structures and suspension systems and
was a good fit with Tower's existing upper body systems business. It also
provided Tower with an entree into international markets. A month after the
APC acquisition, Tower acquired SIMES S.p.A., an Italian supplier of upper
body structural components and assemblies for Fiat. This acquisition provided
Tower with a European base of manufacturing and provided a significant new
customer in Fiat.     Acquisitions are likely to remain a major strategic
focus of Tower over the near to intermediate term. The automotive supply
industry is consolidating at a rapid pace, and Tower is expected to be one of
the consolidators. However, the company is expected to use a balanced mix of
debt equity and internal cash generation to fund its expansion activities, and
debt leverage is expected to decline to the 45-50% level over time.

    OUTLOOK: POSITIVE.
    Ratings could be raised if the integration of recent acquisitions goes
smoothly and cash flow protection measures improve as a result of debt
reduction and/or improved profitability, Standard & Poor's said.
-- CreditWire.

SOURCE  Standard & Poor's CreditWire