Moody's places auto supplier Tenneco's credit ratings on negative watch

By Matt Tracy

Oct 31 (Reuters) - Ratings agency Moody's Ratings on Friday put global auto parts supplier Tenneco's credit ratings on negative outlook, while affirming its current credit standing. In placing the Northville, Michigan-based auto supplier on negative credit watch, Moody's cited the turbulent macroeconomic environment and implications for the global auto industry of persistent tariffs that began with U.S. President Donald Trump's widespread tariffs in April.

Tenneco's leverage has remained relatively high, while its revenue margins have stayed tight in recent quarters, Moody's analysts wrote on Friday. The company had roughly $13.4 billion in value-add revenue, and nearly $16 billion in reported revenue, for the twelve months ending June 30, the analysts noted. The decision to put Tenneco's ratings on negative watch comes against the backdrop of fellow auto parts supplier First Brands' bankruptcy filing on September 29. Major subprime auto lender Tricolor Auto Holdings also filed for bankruptcy on September 10.

Moody's analysts highlighted Tenneco's scale and geographic presence, as well as its strong product and customer base, in maintaining the auto supplier's current B2 speculative-grade credit rating.

"The rating affirmations reflect that despite an uneven quarter-to-quarter performance over the last eighteen months, key metrics have been relatively stable but at weak levels," the analysts wrote.

(Reporting by Matt Tracy; Editing by Toby Chopra)