S&P Upgrades Ford Motor Co. Rating to BBB-
Ford Motor Co.'s rating has been upgraded to BBB- by S&P Global Ratings, reflecting positive outlook and strong financial position.
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.
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.
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.
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.
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.