Stacy94PGT

Major agencies cut Ford's unsecured debt rating

Reuters

NEW YORK -- All three major credit-rating agencies today cut their senior unsecured debt ratings on Ford Motor Co., citing the automaker's plans to raise $18 billion in debt financing, much of it secured by Ford's assets.

Ford said today that the financing will help address its negative operating cash flow, fund its restructuring and boost liquidity.

Moody's cut Ford's senior unsecured debt rating by one notch to "Caa1," seven steps below investment grade, from "B3." The financing plan will leave fewer assets available to protect the debt of unsecured creditors, Moody's said.

At the same time, Moody's affirmed Ford's corporate family rating of "B3," saying the new funding will enhance liquidity. The outlook is negative, meaning a downgrade is expected over the next 12 to 18 months.

"It was important for Ford to structure this type of financing plan in order to ensure that it had adequate liquidity as it enters a highly challenging period," Moody's analyst Bruce Clark said in a statement. "The company still faces daunting competitive and market challenges, but this plan would give it some breathing room over the next two years."

Fitch cut Ford's senior unsecured rating to "B," five steps below investment grade, from "B-plus."

Unsecured debt holders would be expected to recover about 34 percent in the event of a default, down from earlier estimates of 68 percent , Fitch said.

Standard & Poor's cut Ford's unsecured debt rating two notches to "CCC-plus," seven steps below investment grade, from "B."

S&P also affirmed Ford's "B" corporate credit rating, its fifth lowest junk rating, as well as other ratings on Ford and its finance arm.

__________________
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.....