Moody’s upgrades Ford’s debt ratings to investment grade

Article by Christian A., on May 24, 2012

Ford Motor Co.'s debt was recently upgraded by Moody's Investors Service to investment grade, ending its six-year struggle to get back the Blue Oval and other assets mortgaged in 2006. Moody’s is the second ratings agency to move Ford’s debt from having had a junk status. This puts the company nearer to its goal to recover assets that had been mortgaged in 2006 to avoid bankruptcy.

Ford was able to raise $23.5 billion and this made it capable of avoiding government bailouts or bankruptcy when the industry faced a crisis in 2008. In a statement, executive chairman Bill Ford Jr. said that the Ford Blue Oval is “back where it belongs” and its Ford family now has 166,000 employees globally again.

He added that this achievement is the product of many years of hard work by everyone involved with Ford. Moody’s said that this upgrade was decided after having seen how Ford has become stronger in North America. Moody’s expects that Ford’s improvements will probably be “lasting.” Moody’s said that Ford will still manage its balance sheet well and that it is confident that Ford will be able to retain its investment grade rating even with the European downturn.

Moody's thinks that Ford has proven how committed it was to maintain sound operating and financial disciplines by preserving a low break-even level; match production levels to retail demand; limit the use of incentives and price discounting; capitalize on the use of global vehicle platforms; and to form “healthy” relationships with suppliers.

Moody’s warned that Ford will need to boost its strength outside its North America stronghold before the agency will increase its rating further. So that Ford cold have a positive outlook or attain a higher rating, Ford will have to show clear progress in building profitability outside of North America. This would need a turnaround of its European operations and the profitable expansion in China. It added that Ford will need to keep its solid position in North America and to have a “healthy” liquidity profile.

Topics: ford

If you liked the article, share on:

Comments

Recommended

Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries