Ford Motor Co. & Related Entities' Ratings Affirmed by S&P
3 March 1998
Ford Motor Co. & Related Entities' Ratings Affirmed by S&P
NEW YORK, March 3 -- Standard & Poor's today affirmed its
ratings on Ford Motor Co.(Ford) and various related entities (see list below).
This action followed Ford's disclosure that the previously-planned spin-off to
shareholders of its 80.7% ownership stake in Associates First Capital Corp.
(The Associates) is to be accompanied by a $3.1 billion cash distribution to
participants in Ford's U.S. employee savings plans.
Standard & Poor's had lowered Ford's ratings (corporate credit rating to
single-'A' from single-'A'-plus) on Oct. 9, 1997, when Ford initially
announced its intention to spin-off The Associates. The downgrade reflected
the deterioration in financial flexibility that will result from completion of
this pending transaction, given the significance of Ford's investment in The
Associates as a store of value - Ford's stake having a current market value of
$22.7 billion. Moreover, the substantial and growing earnings contribution of
The Associates had afforded Ford some measure of diversity amidst its cyclical
automotive business. However, Ford now has sufficient leeway at the current
rating level to support the additional distribution, particularly in light of
its presently very strong earnings and cash flow, and its large cash position
($12.7 billion net of parent-level borrowings at yearend 1997).
OUTLOOK: STABLE
Continued favorable market conditions in North America over the next 1-2
years should enable Ford to maintain very good overall financial results,
while implementing strategies for improving the performance of its European
and Latin American automotive operations. Results in recent quarters lend
confidence that Ford's accelerated cost- cutting efforts are yielding results,
Standard & Poor's said. -- CreditWire
RATINGS AFFIRMED:
Ford Motor Co.
Corporate credit rating A/Stable/A-1
Senior debt A
..Bank loan A
Ford Motor Co. of Australia Ltd.
Corporate credit rating A-/Stable/-
Ford Motor Credit Co.
Counterparty credit rating A/Stable/A-1
Senior debt A
Subordinated debt A-
Commercial paper A-1
Bank loan A
Ford Credit Australia Ltd.
Ford Motor Credit Co. of New Zealand Ltd.
Ford Credit Canada Ltd.
USL Capital Corp.
Senior debt** A
Ford Holdings Inc.
Senior debt* A
Ford Motor Co. Capital Trust I
Preferred stock A-
Ford Credit Europe PLC
Corporate credit rating A/Stable/A-1
Senior debt A
Bank loan rating A
Commercial paper A-1
CDs A-1
Ford Motor Co. S.A. de C.V.
Commercial paper* A-1
Ford Capital B.V.
Sr debt* A
Commercial paper* A-1
Hertz Corp.
Corporate credit rating BBB+/Neg/A-2
Senior debt BBB+
Subordinated debt BBB
Commercial paper A-2
Hertz Finance Centre PLC
Hertz Australia Pty Ltd.
(gtd: Hertz Corp.)
Commercial paper A-2
*Guaranteed by Ford Motor Co.
**Guaranteed by Ford Motor Credit Co.
SOURCE Standard & Poor's CreditWire