Moody's said that Ford Credit's ownership by and exposure to Ford Motor Co. was the reason for the downgrade, and said it was worried a shift in demand away from SUVs has brought down the collateral backing Ford Credit's receivables. These factors, according to the agency, figure to compound the normal default and delinquencies that accompany an economic downturn and could pressure Ford Credit's operations.
The agency did applaud Ford Credit for suspending its dividend to its parent and taking other actions to keep a prudent leverage posture and adequate liquidity and capital positions.
The downgrade comes a day after Moody's moved its ratings on Chrysler LLC and its finance arm further into junk status, sending it from Caa1 to Caa2. Those downgrades were also based on expected sales declines well into 2009. - Lou Whiteman
See Dealwatch: Autos
Comments
Moody's Investors Service downgraded its rating on Ford Motor Credit LLC from B2 to B1 and warned further action was possible, continuing a slew of downgrades in recent weeks as rating agencies grapple with the impact of slowing auto sales.
This question is for Alan Mulally and Lewis Booth.
Why does Ford Credit not allow a loan to an
American who has bought and paid off in full
a Ford Credit financed car?
Thank you, Carl Banks Jr. A Vietnam Veteran