DBRS confirms Ford Credit Canada Ltd. at A (high) and R-1 (low)

Ford Credit Canada Ltd. - Confirms at A (high) and R-1 (low) 

May 23,2001.09:30AM 

Kam Hon / David Schroeder
(416) 593-5577 x243/x232
e-mail: khon@dbrs.com <mailto:khon@dbrs.com>


Rating 		Trend 		Rating Action		Debt Rated 
A (high)		Negative	Confirmed
Unsecured Senior Notes (guar. by
 							Ford Motor
Credit Co.)

R-1 (low)	Stable		Confirmed		Commercial Paper
(guar. by Ford
 							Motor Credit
Co.)


Unsecured Senior Notes rating for Ford Credit Canada Ltd., (based on the
guarantor, Ford Motor Credit Company ("FMCC"), is confirmed at A (high)
and the trend remains Negative. (See previous press release dated April
23, 2001.) The Commercial Paper rating is confirmed at R-1 (low) with a
Stable trend. These actions are in line with the accompanying rating
action on Ford Motor Company ("Ford" or "the Company"). Ford owns 100%
of FMCC, provides support through a profit maintenance agreement and
produces the products that are the major source of FMCC's financing
activities by far. With additional consideration for the strategic
importance of the financing arm to Ford, DBRS believes that the credit
strength of FMCC should be consistent with the credit strength of Ford.

The confirmation follows the announcement yesterday that the Company is
going to replace about 13 million Firestone "Wilderness AT" tires on
Ford vehicles to prevent potential future failures. The Company will
take a $2.1 billion after-tax charge in the second quarter of 2001 to
cover the program. In addition, the Company has suspended share
repurchases effective immediately.

The Company has ample liquidity to fund the tire replacement program
internally. As at the end of March 2001, the Automotive Group has $7.1
billion in net cash including VEBA, ($5.5 billion, net of payment to AB
Volvo in early April). The suspension of the share repurchase program
also strengthens the Company's liquidity. The Company's financial
position, although weakened by the charge, will remain above average.
Furthermore, the Company's modest debt maturities schedule, averaging
28.5 years, further increases Ford's financial flexibility. However, the
Company's profitability has been under pressure. The weakening North
American automobile market and intensifying competition in the highly
profitable truck and SUV segments have dented the Company's performance
during the first quarter of 2001. Although the tire replacement action
will likely help preserve the reputation of the Ford brand in the long
run, the negative publicity could hurt current sales, reigniting the
safety concerns brought on by the tire-recall incident in August 2000.
Potential impact on the Company's operation in the near term is
uncertain. At a minimum, the unwelcome distraction would add to the
Company's challenge to maintain profitability in the face of weakening
market conditions and intense competition.


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in 1976. Privately-owned and operated without affiliation to any
organization, DBRS is respected for its independent, third-party
evaluations of corporate and government issues, spanning North America,
Europe and Asia. DBRS' extensive coverage of securitizations and
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provider of comprehensive, in-depth credit analysis.   www.dbrs.com