JPMorgan and Bank of America are leading an 18-month, $300 million facility for Lear Corp., additional funding from its $1.7 billion primary credit facility. The $300 million loan is priced at LIBOR plus 1-1/2%. It will be used to increase additional excess liquidity following the payoff at maturity of Lear's $600 million 7.96% senior notes in May 2005, according to a Securities and Exchange Commission filing.
Located in Southfield, Mich., Lear supplies automotive interiors to customers including Ford, General Motors and BMW. Last week, Lear's Board of Directors declared a quarterly cash dividend of $.25 per share on the company's common stock. In 2004, it had annual net sales of $17 billion. For the second quarter it posted net sales of $4.4 billion and a net loss of $44.4 million. Moody's Investors Service downgraded the senior unsecured debt rating of Lear to Ba2 from Baa3, citing reduced expectations for the company's near term profitability and cash flow, the increase in indebtedness and the resulting lower debt protection ratios over the intermediate term. Calls to Lear were not returned.