Research Update: Ford Motor Co. And Subsidiary Ratings Lowered To 'BB+' And Placed On CW Negative Due To Weaker Metrics, Pandemic Risk

Ford Motor Co. announced it is suspending production at its manufacturing sites in Europe for four weeks and halting production in North America to clean these facilities and boost containment efforts for the COVID-19 coronavirus. We expect Ford's EBITDA margin to remain below 6% on a sustained basis and believe that its free operating cash flow to debt is unlikely to exceed 15% on a consistent basis. Ford has drawn $13.4 billion on its corporate credit facility and $2 billion on its supplemental credit facility. We believe the company's current cash position stands at about $36 billion. We are downgrading our long-term issuer credit rating to 'BB+' from 'BBB-'. At the same time, we are assigning issue-level ratings of 'BB+'

...- Ford Motor Co. announced it is suspending production at its manufacturing sites in Europe for four weeks and halting production in North America to clean these facilities and boost containment efforts for the COVID-19 coronavirus. We expect Ford's EBITDA margin to remain below 6% on a sustained basis and believe that its free operating cash flow to debt is unlikely to exceed 15% on a consistent basis. - Ford has drawn $13.4 billion on its corporate credit facility and $2 billion on its supplemental credit facility. We believe the company's current cash position stands at about $36 billion. - We are downgrading our long-term issuer credit rating to '##+' from '###-'. At the same time, we are assigning issue-level ratings of '##+' on Ford's unsecured debt. - We are also placing the ratings on CreditWatch with negative implications, which reflects at least a 50% chance that we could lower the ratings depending on factors such as the duration of the plant shutdowns, the rate of cash burn,...

Research Update