Research Update: VW's Captive Finance Entities Affirmed At 'BBB+/A-2' After Reorganization; New Entity Rated; Outlook Stable

On July 1, 2024, Volkswagen AG (VW) completed the reorganization of its captive finance entities, which maintain a strategic position within the wider VW Group. In our view, although the reorganization strengthens the overall market position of Volkswagen Bank GmbH (VW Bank), its funding profile now depends more heavily on access to wholesale markets. We therefore affirmed our 'BBB+/A-2' long- and short-term issuer credit ratings on VW Bank, and on Volkswagen Financial Services Overseas AG (VWFS Overseas; formerly known as Volkswagen Financial Services AG). At the same time, we assigned our 'BBB+/A-2' long- and short-term issuer credit ratings to a new entity that will be known as Volkswagen Financial Services AG (VWFS Europe; formerly Volkswagen Financial Services Europe AG). The

...- On July 1, 2024, Volkswagen AG (VW) completed the reorganization of its captive finance entities, which maintain a strategic position within the wider VW Group. - In our view, although the reorganization strengthens the overall market position of Volkswagen Bank GmbH (VW Bank), its funding profile now depends more heavily on access to wholesale markets. - We therefore affirmed our '###+/A-2' long- and short-term issuer credit ratings on VW Bank, and on Volkswagen Financial Services Overseas AG (VWFS Overseas; formerly known as Volkswagen Financial Services AG). At the same time, we assigned our '###+/A-2' long- and short-term issuer credit ratings to a new entity that will be known as Volkswagen Financial Services AG (VWFS Europe; formerly Volkswagen Financial Services Europe AG). - The stable outlook on VWFS Europe and VWFS Overseas reflects the stable outlook on VW, which is their direct parent. Our stable outlook on VW Bank indicates that we expect it to remain key to VW's value proposition,...

Research Update