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Ford Ratings Affirmed By Fitch On Pending Associates Spinoff - Fitch Financial Wire -

10 October 1997

Ford Ratings Affirmed By Fitch On Pending Associates Spinoff - Fitch Financial Wire -

    NEW YORK, Oct. 10 -- Ford Motor Co.'s (Ford) senior debt and
Ford Motor Credit Co.'s (FMCC) senior debt are affirmed at 'A+' by Fitch. In
addition, FMCC's commercial paper is affirmed at 'F-1'. This action follows a
review of the impact of the pending spinoff of Ford's 80.7% ownership interest
of Associates First Capital Corp. (AFCC) to the Ford shareholders.
    AFCC, a premier finance company, contributes slightly more than 10% of
Ford's consolidated earnings, but was not considered by Ford as part of its
core automotive production and financing operations. Although the subtraction
of this contribution could temporarily weaken earnings -- but not cash flows -
- of Ford's core business, Fitch considers that the positive momentum in
Ford's automotive business can make up the deficit and support the company's
healthy credit profile.
    Ford Motor's core automotive cash flows continue to improve, built on new
product successes and substantial cost take-outs. Consequently, with a
leveling out of capital spending,sources and uses of funds are in better
balance. Additionally, Ford's maintenance of a substantial automotive
cash position ($18 billion at midyear 1997) will likely enable it to avoid
borrowing if auto sales weaken for a prolonged period.

SOURCE Fitch Financial Service