S&P assigns junk grade to Ford Motors
Credit rating agency Standard & Poor’s (S&P) is lowering the credit rating of the US auto group Ford Motor to junk status because of the major problems the corona crisis is causing in the auto industry. This means that, according to S&P, there are significant risks associated with Ford’s ability to meet its financial obligations.
Ford has closed factories worldwide, including in North America. According to S&P, the company is under enormous financial pressure because no turnover is turned to cover expenses. The agency is now lowering its rating to BB + by one step and is not ruling out further reductions. Ford has a debt of nearly $ 36 billion. The company has already said to suspend its dividend to strengthen its financial buffers.
Moody’s also came up with a cut in Ford’s credit rating. Moody’s says that Ford and other major automakers such as General Motors (GM) and Volkswagen are experiencing an unprecedented “credit shock” from the corona crisis.