Ford Motor Co.
(
F
) has issued $1.25 billion note for three years after its rating
was enhanced by Fitch Ratings in April 2012. Fitch Ratings Services
boosted the issuer default rating of Ford and its Ford Motor Credit
Company LLC (Ford Credit) unit to "BBB-" from "BB+." The
advancement was attributable to the company's better financial
performance along with improvement in balance sheet and product
portfolio.
The 2.75% notes were issued at par, thus saving 1.125% from
$1.55 billion of 3.875% bonds (due 2015), which was issued in
October 2011. The company's last issue was in January 2012 when it
released $1 billion of 4.25% notes due 2017. The sale of these
notes was organized by
Goldman Sachs
(
GS
),
HSBC
(
HBC
),
Morgan Stanley
(
MS
), and
The Royal Bank of Scotland
(
RBS
).
Ford recorded an improvement in its debt position in the last
quarter. Its Automotive debt reduced by $2.9 billion to $13.7
billion as of March 31, 2012, from $16.6 billion as of March 31,
2011. The company's Automotive operating-related cash flows
declined significantly to $900 million from $2.2 billion in the
first quarter of 2011.
Ford is one of the largest automobile producers worldwide and a
supplier of auto financing through its Ford Motor Credit
subsidiary.The company produces and distributes automobiles in 200
markets across six continents.
The company focuses on debt reduction strategy with appropriate
product plans. However, economic weakness in Europe as well as
higher structural and commodity costs have had a negative impact on
its growth.
The company retains a Zacks #3 Rank on its stock, which
translates to a short-term (1 to 3 months) Hold rating. We
currently have a long-term (more than 6 months) Neutral
recommendation on the stock.
FORD MOTOR CO (F): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
HSBC HOLDINGS (HBC): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
ROYAL BK SC-ADR (RBS): Free Stock Analysis
Report
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