U.S.A.:S&P faces sharp questions over Ford credit review - Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars
Ford Forum Ford Forum

» Auto Insurance
» Featured Product
ยป Wheel & Tire Center

Go Back   Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars > Fordforums Community > Latest Ford News and Racing News > Ford Worldwide News
Register Home Forum Active Topics Photo Gallery Auto Loans Garage Mark Forums Read Auto Escrow

FordForums.com is the premier Ford Forum on the internet. Registered Users do not see the above ads.
Reply
 
LinkBack Thread Tools Display Modes
Old 10-28-2003, 21:44   #1 (permalink)
Registered User
 
Stacy94PGT's Avatar
 
Join Date: Feb 2001
Location: The Hills of North Georgia,USA
Posts: 7,859
U.S.A.:S&P faces sharp questions over Ford credit review

Automotive News
Reuters / October 28, 2003

DETROIT -- Credit rating agency Standard & Poor's faced several tough questions Tuesday from investors who accused the agency of misleading the market in its evaluation of Ford Motor Co.

Last week, S&P analyst Scott Sprinzen said he was considering lowering Ford's corporate bond rating to BBB- -- only one step higher than junk, or below-investment-grade, status. The move came nearly a year after Sprinzen had lowered Ford's rating to BBB and set several targets for Ford to meet in 2003, including break-even results in its automotive business.

In a conference call Tuesday, Sprinzen said Ford's continuing losses in its European unit and its reliance on cost-cutting to boost profits this year meant the rating could still be cut, even though Ford's automotive operations will likely break even and the company has raised its earnings estimate for 2003.

"The idea was that (break-even automotive) was necessary to maintain the rating, but not necessary and sufficient," Sprinzen said. "The idea was that '03 was a steppingstone to something much better, and we needed to see the trajectory of further improvement to feel the triple-B was warranted."

Ford has some $180 billion in outstanding debt, mostly to fund loans from its Ford Credit arm, and its bonds are among the most widely held in global markets. Sprinzen's move last week roiled bond traders, causing a selloff in Ford bonds.

Some investors on the conference call accused the rating agency of "moving the goalposts" on Ford, saying the world's second-largest automaker had met the targets laid out last year and had shown it could improve its results in a tough environment.

"Investors have no real clear understanding of what the credit opinion of S&P is on Ford," one portfolio manager told Sprinzen on the call. "It seems every metric that Ford achieves, S&P in their analysis changes or twists their metric in terms of what they're looking for out of this company."

Sprinzen disagreed.

"We have been pretty clear in the milestones we are looking for," he said. "How could anyone have thought just breaking even in a core business in a fairly good year was really all it would take to solidify this rating?"

Other investors said they were confused by the agency's statement that it might not lower its rating on Ford's commercial paper, or short-term borrowings, even if it cut the corporate rating.

Ford's commercial paper is rated A-2, higher than any company with a corporate rating of BBB- or below. In a release Monday, the agency said Ford's "extraordinary liquidity" -- which Ford estimates at $75 billion -- might mean Ford could keep its commercial paper rating.

Sprinzen said no decision had been made, but the agency would make its decision by Nov. 18. Standard & Poor's is a division of publisher McGraw-Hill Cos. Inc.
__________________
Stacy94PGT
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
Stacy94PGT is offline   Reply With Quote
Sponsored Links
Advertisement
 
Reply

  Ford Forums - Mustang Forum, Ford Trucks, Ford Focus and Ford Cars > Fordforums Community > Latest Ford News and Racing News > Ford Worldwide News



Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
U.S. Ford leadership depth critical to turnaround Stacy94PGT Ford Worldwide News 0 06-15-2003 05:17
FORD TOUGH: The pressure's on for Bill Ford Jr. to finish first Stacy94PGT Ford Worldwide News 0 06-10-2003 05:52
'Henry had the dream' Stacy94PGT Ford Worldwide News 0 03-28-2003 06:58
A CENTURY OF VISION: Fords built city, changed the world Stacy94PGT Ford Worldwide News 0 03-12-2003 08:17
Ford Product-Led Transformation: 2003 RPO83 Trans | Driveline 0 07-22-2002 07:48

Powered by vBadvanced CMPS v3.2.2

All times are GMT -7. The time now is 04:51.



Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0
Garage Plus vBulletin Plugins by Drive Thru Online, Inc.