Ford Earns Credit Upgrade From S&P

In yet another sign Ford is distancing itself from past financial difficulties, Standard & Poor's has assigned a BBB- rating for both Ford and its finance subsidiary, Ford Motor Credit, S&P announced today. The improved rating means Ford's debt is now considered investment grade, up from its "below investment grade," or "junk," status of BB+.

In May 2012, Moody's named Ford's debt ratings investment-grade for the first time in seven years. Fitch Ratings upgraded the company to investment-grade in April 2012. An investment-grade rating signals that a company's debt has a low risk of default. Companies with investment-grade credit ratings generally pay lower interest on debt.

S&P's outlook for both Ford and Ford Motor Credit were also revised to stable from positive. FCE Bank, Ford Credit's U.K.-based bank, was also upgraded by S&P, from BBB- to BBB, reflecting stricter bank oversight compared to the U.S.


The basis for S&P's ratings upgrades for Ford includes its "solid performance in North America," as well as recent sales gains in China. Standard & Poor's also cited Ford's "retail market share expansion in Europe" and better pension funding status for its improved credit position.

Ford CFO Bob Shanks was quoted in a brief company statement today saying "The fact that we are now rated investment grade by all four major ratings agencies is further evidence of the continued progress the Ford team is making delivering our One Ford plan."

-- Material from The Associated Press was used in this report.

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The article Ford Earns Credit Upgrade From S&P originally appeared on Fool.com.

Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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