Daily Management Review

S&P removes Ford and GM from ratings for revision


The international rating agency S&P Global Ratings (S&P) has removed the ratings of Ford Motor and General Motors from the list for revision by confirming them at the current levels, "BB +" and "BBB", respectively, the outlook for all ratings is negative, the agency said in a release.

JD Hancock
JD Hancock
“The negative outlook reflects our view that there is at least a third of the likelihood that we can downgrade, if, for example, the ratio of debt to EBITDA increases,” - explains the agency, specifying that for Ford this critical bar is 4x and for GM - 3x.

In addition, the S&P may downgrade the ratings if Ford's FOCF to debt ratio remains below 10% over the next two years, and GM remains below 15% for the same time.

The agency may also revise its forecasts for both ratings to stable if demand for passenger cars returns to "pre-coronavirus" levels.

GM manufactures cars and trucks in 30 countries, and sells and services in 140 countries. GM is headquartered in Detroit, Michigan.

The Ford concern was founded in 1903 by Henry Ford, who created it, having received 28 thousand dollars for business development from five investors. The company became known as the first in the world to use the classic car assembly line. The company employs about 191 thousand employees worldwide.

source: bloomberg.com