Moody's Investors Service motivated the decision with intensive restructuring that has boosted Ford Motor Co.'s viability. The rating company is also ready to raise the rating for Ford's finance division, Ford Motor Credit Co.
"The rating action affects about $25 billion of debt," Moody's said for to Reuters. The move raises Ford's corporate family rating by two grades to Caa1. The move however, doesn't take Ford out of the woods yet, as the Caa1 rating is still seven steps below investment grade, which is the theoretical threshold that lets investors know if they are likely to recover their money with a profit or not.
Moody's said it may also raise the rating for Ford Motor Credit Co. division, which now stands at Caa1. The rating company also said that "Ford should be able to fund its cash burn until the industry recovers around 2011", as Automotive News reported.
"The period of greatest risk in Ford's restructuring has passed," Moody's said in a statement. Moody's has a 40% share in the world credit rating market, so its reliability is regarded by many important investors all over the world.
Ford saw increasing sales in the US thanks to its fuel efficient range of vehicles, favorable general image from the American consumer and last but not least, the vital governmental financial aid through the CARS scrappage scheme.
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