Report: Ford Aims to Win Back Investment Grade Rating
Ford Motor is planning to win back its investment grade credit rating that it lost in 2005, The Wall Street Journal reported, citing people familiar with the situation.
Ford, the only U.S. carmaker that did not receive a government bailout during the financial crisis, aims to get back the investment grade rating in 2012, or by the end of 2011, the sources told the paper.
An investment grade rating usually means a company can borrow money at lower interest rates.
In the second quarter, Ford retired $7 billion of debt, lowering annualized interest costs by more than $470 million. Ford ended the quarter with $27.3 billion in automotive debt.
Ford expects to be solidly profitable this year, but it borrowed more than $23 billion in late 2006 to fund its turnaround, leaving it with a far heavier debt load than the post-bankruptcy GM and Chrysler.
Ford avoided the bankruptcies that engulfed GM and Chrysler but supported its rivals in their requests for U.S. government funding that also helped to prevent a collapse of the auto parts supply base.
Ford could not immediately be reached for comment outside regular U.S. business hours.
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