Ford Gets 'Investment Grade' Rating At Moody's

Ford Motor Company (NYSE: F) is now considered ‘investment grade’ at Moody’s after a late-day upgrade.  Moody’s Investors Service raised the senior unsecured ratings of Ford to Baa3 from Ba2, which is the lowest range of investment grade ratings.  Ford Motor Credit Company LLC was also raised to Baa3 from Ba1.

Moody’s went on to note that Ford’s Corporate Family and Probability of Default Ratings, as well as its Speculative Grade Liquidity rating, are withdrawn.   Where this rating gets interesting is that Ford’s secured credit facility was lowered to Baa3 from Baa2 in anticipation of the imminent fall away of the bank agreement’s security interest.  Moody’s said, “This fall away, which would be consistent with the facility’s terms, would result in any outstandings being pari passu with Ford’s other senior unsecured debt.”

Today’s upgrade is based on Ford’s position in North America, as well as its robust liquidity position and the expectation that the company will continue to embrace sound operating and financial disciplines.

Moody’s even made some inference that Ford will weather the storm: “We believe that these strengths will enable Ford to maintain an investment grade profile in the face of the sector’s ongoing cyclicality and weakness in the European market.”

Ford closed down 0.1% at $10.19 but the stock was up 1.2% at $10.33 in the after-hours session.

JON C. OGG