Moody's raises Ford Credit's rating one notch
NEW YORK, March 4
NEW YORK, March 4 (Reuters) - Moody's Investors Service on Thursday raised its rating on Ford Motor Co's (F.N) finance arm by one notch, citing an improved capital position and moves to preserve liquidity during the economic downturn.
Moody's raised Ford Motor Credit Co's rating to B2, its fifth-highest junk rating, from B3. The outlook is stable, indicating another rating change is not expected over the next 12 to 18 months.
Though Ford Credit's asset quality deteriorated during the economic downturn, it held up better than its auto lender peers and should improve as the economic recovery progresses, Moody's said in a statement. Higher unemployment rates contributed to a rise in auto repossessions, but improved used-car values cushioned the impact on Ford Credit last year, the rating agency said.
"Moody's expects that Ford Credit will be profitable in 2010, that leverage will continue to be managed prudently, and that the company will make advances in expanding its access to funding as market conditions improve," the agency said.
Ford Credit's senior unsecured rating is now one notch higher than Ford Motor Co's, reflecting expectations that Ford Credit's unsecured debt holders would recover more if the company liquidates, the rating agency said. (Reporting by Dena Aubin; Editing by Leslie Adler)