S&P Global Ratings has announced the upgrade of Ford Motor Co.'s rating to BBB-. This upgrade marks the restoration of Ford's investment grade status, which was lowered to junk in 2020.

Positive Outlook for Ford Motor Co.

According to the statement released by the rating agency, S&P expects Ford Motor Co.'s EBITDA margins to exceed 8% by 2024 and 2025. This positive outlook is driven by the strong momentum in Ford's commercial vehicle franchise and gradual cost reduction efforts.

Strong Financial Position

S&P also highlighted Ford's impressive financial position, including a cash balance of approximately $29 billion as of September 30. With an overall liquidity of about $51 billion, Ford has ample leeway to compete effectively in its end markets.

Successful Restructuring Efforts

In addition, S&P acknowledged Ford's successful initiatives in addressing its overcapacity and higher costs in Europe. The company has also completed the restructuring of its loss-making South American operations, shifting the business towards a more profitable asset-light model.

Bond Details

Ford currently has approximately $72.4 billion in outstanding bonds, with the majority of that amount, $15.9 billion, set to mature in 2026.

Overall, this upgraded rating reflects S&P's confidence in Ford's ability to perform well in the coming years, driven by its commercial vehicles and cost reduction efforts.

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