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 Ford Debt Rating Is Cut Further Into Junk by Moody's (Update1) By Bill Koenig Dec. 22 (Bloomberg) -- Ford Motor Co.'s credit was cut further below investment grade by Moody's Investors Service, which said the automaker will need to restructure debt to win union concessions similar to those at U.S. competitors. The rating was lowered to Caa3, nine grades below investment status, Moody's said today in a statement. The change affects about $26 billion in debt at Dearborn, Michigan-based Ford. The downgrade "reflects the increased risk that Ford will have to undertake some form of balance sheet restructuring" to get revisions like those General Motors Corp. and Chrysler LLC may receive from the United Auto Workers union under the federal rescue plan, Moody's said. Ford isn't part of the $13.4 billion automaker emergency-aid package that President George W. Bush announced on Dec. 19. The assistance has conditions for GM and Chrysler, including getting their labor costs competitive with those of U.S. plants owned by Asian and European automakers. Mark Truby, a Ford spokesman, didn't immediately comment on the Moody's rating change. The second-largest U.S. automaker "must have UAW parity with GM and Chrysler," Moody's Senior Vice President Bruce Clark said in a statement. "But the UAW is unlikely to make concessions to Ford unless Ford's creditors also bear some pain in the form of a debt restructuring." To contact the reporter on this story: Bill Koenig in Southfield, Michigan at wkoenig@bloomberg.net Last Updated: December 22, 2008 16:53 EST |
