DBRS Places Ford and Ford Credit Under Review with Negative Implications
DBRS has today placed the ratings of Ford Motor Company (Ford or the Company), Ford Motor Credit Company LLC and Ford Credit Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the Company’s operations in North America brought on by high oil prices and a slowing U.S. economy. Negative developments include the following:
(1) A slowing U.S. economy precipitated by the collapse in the housing market has contributed to a sharp decline in the demand for automobiles.
(2) Persistent high oil prices have accelerated the change in consumer preference to more fuel-efficient vehicles, which is the strength of the Asian manufacturers. This has added to the Company’s challenge to stabilize its market share.
(3) The sharp deterioration in residential construction has further dampened the demand for pickup trucks, one of the Company’s more profitable products. Worsening market conditions in North America, especially for large sports utility vehicles (SUVs) and pickup trucks, has added headwinds to Ford’s turnaround efforts.
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Ratings
| Issuer | Debt Rated | Rating Action | Rating | Trend | Notes | Published |
|---|---|---|---|---|---|---|
| Ford Motor Company | Issuer Rating | UR-Neg. | B (low) | -- | Jun 20, 2008 | |
| Ford Motor Company | Long-Term Debt | UR-Neg. | CCC (high) | -- | Jun 20, 2008 | |
| Ford Motor Company | Senior Secured Credit Facilities | UR-Neg. | B (high) | -- | Jun 20, 2008 | |
| Ford Motor Credit Company LLC | Issuer & Long-Term Debt | UR-Neg. | B | -- | Jun 20, 2008 | |
| Ford Motor Credit Company LLC | Short-Term Debt | UR-Neg. | R-4 | -- | Jun 20, 2008 | |
| Ford Credit Canada Limited | Long-Term Debt (guar. by Ford Motor Credit Co.) | UR-Neg. | B | -- | Jun 20, 2008 | |
| Ford Credit Canada Limited | Commercial Paper (guar. by Ford Motor Credit Co.) | UR-Neg. | R-4 | -- | Jun 20, 2008 |