NEW YORK, March 20 (Reuters) - (The following statement was released by the ratings agency)
March 20, 2012--Standard & Poor’s Ratings Services said today that it assigned its ‘BB+’ issue-level rating and ‘cnBBB+’ Greater China credit scale rating to Ford Motor Co.’s 1 billion renminbi (RMB; about $158 million) senior unsecured notes due 2015. At the same time, we assigned our recovery rating of ‘3’ to the notes, indicating our expectation that lenders would receive meaningful (50% to 70%) recovery in the event of a payment default. The notes represent the company’s first renminbi-denominated bond issuance.
The ‘BB+’ corporate credit rating and stable outlook on the Michigan-based automaker remain unchanged and reflect, among other things, Ford’s prospects for generating free cash flow and profits in its global automotive manufacturing business because of improvement in its U.S. competitive position, but also challenges in Europe and substantial underfunded post-retirement obligations. We assume that Ford can sustain its pretax EBIT margin in the mid-single-digit area in total for automotive operations, and avoid large losses in Europe.
(For further details, please see our report on Ford Motor Co., published March 14, 2012, on RatingsDirect.)
-- Credit FAQ: Greater China Credit Rating Scale Explained, April 27, 2011
-- Key Credit Factors: Criteria For Rating The Global Automaker Industry, Oct. 1, 2010
-- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009
-- Business Risk/Financial Risk Matrix Expanded, May 27, 2009
Ford Motor Co.
Corporate credit rating BB+/Stable/--
Ford Motor Co. $1 bil renminbi sr unsec notes due 2015 BB+/cnBBB+ Recovery rating 3