NEW YORK, March 4 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
"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)