Ford Motor Co.'s Proposed Unsecured Notes Assigned 'BBB' Rating

NEW YORK (S&P Global Ratings) May 20, 2019--S&P Global Ratings today assigned its 'BBB' issue-level rating to automaker Ford Motor Co.'s (Ford's) proposed unsecured notes. We expect the company to use the net proceeds from the sale of the notes to repay higher cost affiliate debt and for other general corporate purposes. We expect the transaction to be roughly neutral for Ford's debt to EBITDA (under 1.0x over the next 12-24 months, per our estimates). Our outlook on Ford remains negative. Consistent with our last published report, we will lower the ratings if under our base-case scenario, we think EBITDA margins are unlikely to approach 8% beyond 2020 or if FOCF/debt is unlikely to touch 25% on a sustained basis

...May 20, 2019 NEW YORK (S&P Global Ratings) May 20, 2019--S&P Global Ratings today assigned its '###' issue-level rating to automaker Ford Motor Co.'s (Ford's) proposed unsecured notes. We expect the company to use the net proceeds from the sale of the notes to repay higher cost affiliate debt and for other general corporate purposes. We expect the transaction to be roughly neutral for Ford's debt to EBITDA (under 1.0x over the next 12-24 months, per our estimates). Our outlook on Ford remains negative. Consistent with our last published report, we will lower the ratings if under our base-case scenario, we think EBITDA margins are unlikely to approach 8% beyond 2020 or if FOCF/debt is unlikely to touch 25% on a sustained basis before the next industry downturn. (See "Ford Motor Co.'s Profits Improve Amid Global Turnaround Efforts, China Headwinds Persist; Outlook Negative," published April 26, 2019, on RatingsDirect). The notes are effectively structurally subordinated to any secured debt...

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