Summary: Volkswagen Financial Services AG

Core subsidiary of car manufacturer Volkswagen AG. High geographic diversification. Sound financial profile, with stable earnings and strong capitalization. Business concentration on car financing. Dependence on Volkswagen's franchise and funding support. Wholesale funding profile. S&P Global Ratings' negative outlook on Volkswagen Financial Services AG (VW FS) mirrors that on its parent, Volkswagen AG (VW), and indicates that we may lower our long-term rating on VW FS by one notch within the next 12-24 months if we take a similar rating action on the parent. A revision of the outlook on VW to stable would result in a similar action on VW FS. We could also lower the ratings on VW FS if we saw weaker commitment from VW to support

...Outlook: Negative S&P Global Ratings' negative outlook on Volkswagen Financial Services AG (VW FS) mirrors that on its parent, Volkswagen AG (VW), and indicates that we may lower our long-term rating on VW FS by one notch within the next 12-24 months if we take a similar rating action on the parent. A revision of the outlook on VW to stable would result in a similar action on VW FS. We could also lower the ratings on VW FS if we saw weaker commitment from VW to support its subsidiaries, which could lead us to reassess our view of VW FS as a core entity of the VW group. This could happen if VW relinquished its majority ownership in VW FS or if the captive finance operations ceased to be pivotal to the VW group's worldwide strategy. We consider VW FS' recently announced plans to move Volkswagen Bank AG (VW Bank) into direct 100% ownership of VW from VW FS later 2017 as an integral strategic reorganization measure to consolidate, more efficiently manage, and better insulate European banking...

Summary