Superior Industries downgraded to ’CC’ at S&P amid potential debt restructuring

Investing.com -- S&P Global Ratings has downgraded the credit rating of aluminum wheel manufacturer, Superior Industries International (NYSE:SUP) Inc., from ’B-’ to ’CC’ due to potential debt restructuring. The rating change comes in the wake of significant volume losses reported by the company with critical North American original equipment manufacturer (OEM) customers starting in the second quarter of 2025.

Superior Industries is expected to restructure its debt obligations due to these volume losses and the resulting financial distress. The company has reported the loss of purchase orders from major North American OEM customers, which represent 33% of its planned 2025 revenues. This loss is anticipated to have a significant impact on the company’s cash flow.

The company is currently in advanced discussions with its lenders to exchange debt for common stock, a move that S&P Global Ratings views as a distressed exchange. As of the end of the first quarter of 2025, Superior Industries held $54.5 million in cash. However, the company is expected to experience significant cash burn throughout 2025 due to the volume loss and high interest burden, leading to a liquidity shortfall.

In response to these challenges, Superior Industries is expected to engage in a debt restructuring to reduce its outstanding debt and provide liquidity relief. Without such restructuring, S&P Global Ratings believes the company will face a liquidity shortfall.

The outlook for Superior Industries remains negative, reflecting S&P Global Ratings’ intention to further lower the company’s rating to ’SD’ (selective default) or ’D’ (default) upon the completion of the distressed restructuring. The downgrade and negative outlook indicate the serious financial challenges facing the company as it navigates significant volume losses and debt obligations.

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