Research Update: BMW AG 'A/A-1' Ratings Affirmed Following Implementation Of New Captive Finance Criteria; Off UCO; Outlook Stable

We have completed our ratings review of global premium carmaker BMW AG (BMW) and its subsidiaries under our new criteria for issuers with captive finance operations (see "The Impact Of Captive Finance Operations On Nonfinancial Corporate Issuers," published Oct. 23, 2023). Although BMW's financial services division has a meaningful exposure to residual value (RV) risk from its leasing business, representing more than 30% of its portfolio, we think the group has comprehensive RV risk management structures in place, along with a track record of successfully managing RV risk. We therefore affirmed our long- and short-term 'A/A-1' issuer credit ratings on BMW and its rated subsidiaries. At the same time we affirmed our 'A/A-1' issue ratings on the group's senior unsecured

...- We have completed our ratings review of global premium carmaker BMW AG (BMW) and its subsidiaries under our new criteria for issuers with captive finance operations (see "The Impact Of Captive Finance Operations On Nonfinancial Corporate Issuers," published Oct. 23, 2023). - Although BMW's financial services division has a meaningful exposure to residual value (RV) risk from its leasing business, representing more than 30% of its portfolio, we think the group has comprehensive RV risk management structures in place, along with a track record of successfully managing RV risk. - We therefore affirmed our long- and short-term 'A/A-1' issuer credit ratings on BMW and its rated subsidiaries. At the same time we affirmed our 'A/A-1' issue ratings on the group's senior unsecured debt, removing all ratings from under criteria observation (UCO). - The stable outlook reflects our view that BMW will continue to expand its competitive battery electric vehicle (BEV) line, increase its BEV market share,...

Research Update