mackinaw Posted April 30, 2011 Share Posted April 30, 2011 From today's Automotive News: DETROIT -- Ford Motor Co. continues to steadily shovel away the mountain of debt it took on to pay for its restructuring. But a rating agency says that whacking debt isn’t the only barrier to Ford’s bonds moving out of the junk category. "The automaker’s stated goal is to regain an investment-grade rating, which is considered a prerequisite of lowering its borrowing costs. Doing so would make it less expensive for Ford, and Ford Motor Credit, to raise both day-to-day operating funds and the money it then lends to dealers and customers. "In the first quarter, Ford axed another $2.5 billion in debt, bringing its total outstanding debt to $16.6 billion as of March 31. "Ford remains three notches below an investment-grade rating. Standard & Poor's Ratings Services has said there’s a chance Ford could get an upgrade of one or more notches in 2011. "On April 26, after Ford issued its first-quarter results, the ratings agency spelled out what Ford must still do to see an upgrade. 1) Exceed $4 billion in positive cash flow this year. 2) Keep pre-tax automotive profit margins in the upper single-digit range in North America, and in the mid single-digit range overall. 3) Remain profitable in Europe, or at least avoid large losses. "S&P analyst Robert Schulz told Automotive News reporter Jamie LaReau that this isn’t a comprehensive list. But it’s a pretty good indication of what Ford needs to do to reassure rating agencies that Ford is out of the woods "But S&P wants to see more than good numbers. For Ford’s credit rating to go up, the rating agency says the automaker must “adequately” resolve this year’s U.S. labor contract negotiations. "Don’t expect any major action from the rating agency before autumn." Full article here: Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110429/OEM01/110429847/1142#ixzz1Ky4GHpgM Quote Link to comment Share on other sites More sharing options...
rkisler Posted April 30, 2011 Share Posted April 30, 2011 (edited) From today's Automotive News: DETROIT -- Ford Motor Co. continues to steadily shovel away the mountain of debt it took on to pay for its restructuring. But a rating agency says that whacking debt isn’t the only barrier to Ford’s bonds moving out of the junk category. ..... "Don’t expect any major action from the rating agency before autumn." Full article here: Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110429/OEM01/110429847/1142#ixzz1Ky4GHpgM And in other news, Standard and Poor's has renewed its AAA rating for Lehman Brothers...... Edited April 30, 2011 by Austin Quote Link to comment Share on other sites More sharing options...
Mark8LSC CE0464 Posted April 30, 2011 Share Posted April 30, 2011 And in other news, Standard and Poor's has renewed it's AAA rating for Lehman Brothers...... Awesome! Too funny! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.